Reference no: EM132159279
Peter Sanders, a member of the Board of Directors of Wheat Growers Corporation (WGC), was getting his shoes shined on his lunch break and reading the daily newspaper. Two men sitting to his right were discussing a business deal. At one point one of the men told the other, "I think this year's corn supply is going to be very small due to the cold winter we just had. Plus, I know some other info that no one else knows. If I were you, I would buy as many shares of Corn Supply of America (CSA) as I could get." The other man replied, "Thanks for the tip. I'll go and do just that." At that time, both men left the area. Peter heard all their statements. After getting his shoes shined, Peter left to return to work at WGC.
In the afternoon, he got a phone call from a manager at Butter Is Good (BIG), a company that makes and sells butter. The BIG manager wanted to order 800 bushels of wheat at $2 per bushel. The manager asked Peter, "Does that sound good to you?" Peters responded, "Most likely. Write a check and then send it to me." The BIG Manager agreed and hung up the phone.
Before leaving work that day, Peter went online and bought 2,000 shares of CSA stock at $10 per share through his stockbroker. The next day, the shares went up to $15 per share in the morning. The same day, in the afternoon, WGC and CSA announced a joint venture and business deal to supply each other with all necessary wheat and corn. None of the information about the joint venture or deal was public knowledge. Both companies had been discussing this joint venture and deal for more than three months. The Board of Directors of WGC had approved the deal two months prior to the announcement. At the end of the day, the shares of CSA were selling at $30 per share.
1. Do BIG and WGC have a contract for the bushels of wheat? Why or why not? Analyze all issues.
2. Is Peter liable for any criminal activity because he bought 2,000 shares of CSA stock? Why or why not? Analyze all issues.
3. Is Peter liable to his company, WGC, in any capacity? Why or why not? Analyze all issues.
4. Suppose Peter is charged with a crime in federal court. At his arraignment the judge sets his bail at $100 million, orders a jury trial, and does not allow Peter to retain an attorney in any future court proceeding. What can Peter argue to the court? Discuss all relevant issues.