Reference no: EM131791585

Accountant is having Accountant’s offices painted by Trusty Painter. During the paint job, Accountant , the CPA for a member (“Client”) of the Board of ABC Corporation, is reviewing the tax records that Client has dropped off at Accountant’s office. Among the records is an internal ABC Corporation memo that sets out the terms of an impending sale of ABC Corporation, a publicly traded corporation, to another publicly traded corporation that is a leader in the same industry. Accountant immediately purchases ABC Corporation stock. Excited about the events of the day, Accountant decides to take a long lunch break. While Accountant is out for lunch, Trusty Painter happens upon the ABC memo that is open on Accountant’s desk, and Trusty Painter immediately calls Trusty Painter’s brother, a stock broker, who promptly purchases ABC Stock for himself and on behalf of Trusty Painter. Two days later there is a public announcement of the sale and acquisition, and the accountant and the broker, for himself and as agent for his Trusty Painter, sell their stock reaping substantial gains. Did any of these individuals act improperly? If so, how and why? What might the government allege? Would this be a civil action or a criminal action? Would both be possible? What penalties or other relief might be granted? Is there a private cause of action? If so, against whom, and on what grounds?