Explaining the insider trading

Assignment Help Other Subject
Reference no: EM1327040

Dracca's Senior Vice President of Sales, Bob Marley, and one of his sales representatives, Bill Farian, were on a conference call and learned that Dracca's new line of high chairs was going to be recalled the next day. During the call, Farian stated, "This won't be good for stock prices." After the call ended, Marley and Farian immediately contacted their brokers and sold a large portion of their interests in Dracca shares.

Very Good Vinyls (VGV) was a plastic company that periodically purchased used equipment from Dracca's plant where the new line of high chairs was produced. In 2009, VGV purchased a 750-ton injection-molding machine from Dracca for $150,000. Because of the good relationship between VGV and Dracca, Dracca extended credit to VGV for the equipment. Last month, VGV sold the injection-molding machine to a small start-up company for $1,500 two days before filing bankruptcy. VGV still owes Dracca $100,000 for the machine.

In light of these facts, please respond to the following questions using course material and credible outside research to support your findings. A minimum of one paragraph per question is necessary to adequately address the questions posed. Please submit the paper in APA format.

a) Did Marley and Farian commit any securities violations? Please explain the reasons for your conclusion. What factors might the court consider in conducting such an analysis? Would the analysis be different for Marley than Farian? Why or why not?

b) Presuming Farian's statement "This won't be good for stock prices" could be considered disclosure of plan to trade on the nonpublic information, would Farian's sale of stock be a section 10(b) violation? Would it be ethical? Why or why not?

c) Discuss the legal and ethical issues associated with VGV's action in selling the molding machine before filing bankruptcy. What recourse does Dracca have in recovering the monies still owed on the equipment?

d) What actions (internal and external) do you recommend to Dracca to remedy the ethical and legal considerations of this scenario?

Reference no: EM1327040

Questions Cloud

What is the sql : Recently AMI has been experiencing significant downtime because of  a failing software application written for AMI when the company started. This Access database application is responsible for a main manufacturing process.
Second amendment gun/workplace laws : What arguments are available to the plaintiffs? What arguments will the state of Oklahoma make in response?
Characteristics applied by global leaders : Create a forum post and discuss one of the characteristics in terms of how you believe the characteristic is important and should be applied by global leaders.
What are some drawbacks of databases : What are some drawbacks of databases.Can you mix summarized data with non summarized data.
Explaining the insider trading : Dracca's Senior Vice President of Sales, Bob Marley, and one of his sales representatives, Bill Farian, were on a conference call and learned that Dracca's new line of high chairs was going to be recalled the next day.
What is the history of osi model and benefits : Why you will recommend either asymmetric key encryption, symmetric key encryption, or no encryption at all for the Email correspondence.
Explaining return on investment of an organization : What is the relationship between design, as a core competency, and the Return on Investment (ROI) of an organization?
Explain the difference among a price floor price ceiling : Explain the difference among a price floor also a price ceiling. Provide a situation in which a price ceiling may be used.
When potential new suppliers compete for contracts : The company's newly hired VP of the IT is conducting this project because she does not have a security specialist on her staff and has learned that the company does not have the comprehensive security strategy. In fact, she suspects lack of even b..

Reviews

Write a Review

 

Other Subject Questions & Answers

  Memory function in humans

Working-memory approach, which factors make it difficult to be very specific about the duration of short-term memory?

  Explain in brief the actions the ecb

Suppose European Central Bank uses open market operations to undertake this change. Explain in brief the actions the ECB must do in the open market in order to pull this off

  Applications of classical conditioning

How can behavioral learning and classical conditioning be utiliized in teaching potty training? What is your definition of learning?

  Write short notes on carrying capacity

Using examples discuss any two push factors and pull factors that affect demand and supply of tourism Write Short Notes on Topic 1- Doxey's IRRIDEX Topic 2- Butler's TALC Topic 3- Carrying Capacity

  Define and explain workplace violence

Define and explain workplace violence. What are the various forms of workplace violence? Illustrate your answer with various examples.

  Encrypting the message

Using the English alphabet (i.e., mod 26 arithmetic) let plaintext = {p1, p2,… , pn} and corresponding ciphertext = {c1, c2,… , cn}.

  Memory strategies concept

Describe a situation in which you or someone else might be learning a new task or new information

  Discussion on psychology topic

Select a topic discussed in class (or any psychology topic you feel should be discussed further):

  Explaining the breach of contract hypothesis

Paul was a plumbing contractor. Albert and Bert owned an apartment building. Albert and Bert explained to Paul that plumbing work was needed for their respective buildings.

  Cornerstones of freudian theory

One of the cornerstones of Freudian theory is the concept of the unconscious not to be confused with the state of being knocked unconscious by a blow to the head.

  Cross cultural psychology

Which do you believe is most important - to understand the differences, or to understand the commonalities?

  Growths in cognitive psychology

Define the term cognitive psychology. Then explain two important growths in the field of cognitive psychology beyond the utilization of neuron imaging.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd