Assignment 3: Case Studies
Address TWO of the case studies listed. Support your responses with appropriate cases, laws, and other relevant examples. Submit your document to the
Name your document SU_BUS3055_W1_A3_LastName_FirstInitial.doc.
Case Study 1
Brandon Stewart is a research analyst at Ferrell Synch, a premier Wall Street investment company. Stewart’s area of expertise is the technology industry and one of the companies he covers is Frugal Software Inc. Immediately after Frugal announced their IPO in March 2013, Stewart issued a research report stating that the company had excellent business prospects and that the IPO would be a “Strong Buy." A few days after that Stewart exchanged a series of emails with his buddies at Ferrell Synch. In one of the emails, Stewart wrote that "Frugal’s shares should be used to line the bottom of bird cages." Penny Hess, a retired postal worker invested her retirement funds in Frugal after reading Stewart's report. The trading price when Penny purchased her stocks was $242.75 per share. It is currently trading at $30.25. Penny wants to sue Ferrell Synch. Will she succeed? Advance arguments to support your conclusions.
Case Study 2
Claudette Norman worked as a paralegal in the law offices of Morgan & Morgan, a firm specializing in securities law. One afternoon while Claudette was proofreading a document relating the merger of two Internet service providers, the senior Morgan joked “If I weren’t such an ethical lawyer, I could buy up some of their stock and make a ton of money. The stock prices will go through the roof when the announcement of this merger is released.” Later that day, Claudette told her boyfriend, Peter Nesbit what her boss said about the Internet stocks. The next day, Nesbit purchased 250 shares of the stock and sold it ten days later when the news of the merger was made public. Nesbit made a profit of $5,750 on the sale of the stock. Did Morgan, Norman or Nesbit violate any securities law(s) or ethical principles?
Case Study 3
Kevin Mendoza, a former officer and employee of the Italian Bread Co., Inc., owned 200 shares of stock in the bread company. Mendoza quit his position at Italian Bread to become part owner and employee of the Great American Bread Co. Inc., which was a competitor with Italian Bread. Mendoza requested access to Italian Bread’s corporate books to determine the value of his 200 shares of stock. His former employer refused on the basis that Mendoza was a competitor. Does Mendoza have a right to view the books? Why or why not?
|Due By (Pacific Time)
||01/18/2015 11:00 pm