Was smartts lie about having a college degree material

Assignment Help Business Management

Reference no: EM131621295

Case Study- Securities

In 2013, after working at First State Bank for 5 years and Third State Bank for 3 years, Ted Smartt helped found Smartt Capital Corporation (SCC), a venture capital firm that invested in the ecommerce, Internet and similarly situated technology sectors. SCC went public in 2015, and Smartt served as its CEO and chairman of the board. Various documents filed with the SEC stated that Smartt "earned a B.B.A. in accounting from Stanford University." In fact, Smartt only attended Stanford for three years and did not graduate. After being pressured by a journalist, Smartt disclosed the misrepresentation to the SCC board. The same day, the company issued a press release correcting the statement.

The press posted negative comments such as "another CEO that lied about his resume" and speculated about "what else might Smartt be hiding." On the day the press release was issued, SCC's stock price dropped from $42.55 per share to $32.40, but it fully recovered within 90 days.

Shareholders sued, alleging that the misrepresentation violated section 11 of the 1933 Act, section 10(b) of the 1934 Act, and Rule 10b-5.

• Was Smartt's lie about having a college degree material?

• Would your answer be the same if a CEO lied about having helped to take a company through an initial public offering and subsequent acquisition by another company and having led a medical instruments company from incorporation through launch of a new technological breakthrough in surgical instruments?

• If you were a member of the SCC board, would you be comfortable keeping Smartt as CEO once you learned that he had lied about having a college degree?

Reference no: EM131621295

Questions Cloud

Can the plaintiffs obtain a judgment against john personally : Can the plaintiffs obtain a judgment against John personally for his own individual liability, notwithstanding the existence of the corporation?

Discuss the critical issues relating to transfer pricing : Discuss the critical issues relating to the principles and practices of transfer pricing from a management accounting perspective

First european-wide conflict : It has been argued that the Thirty Years' War was the first European-wide conflict. Do you agree? What was the outcome of the war?

Define chicken delight : Carfilo was employed by Food Caterers to deliver hot chicken bearing the trademark Chicken Delight.

Was smartts lie about having a college degree material : Would your answer be the same if a CEO lied about having helped to take a company? Was Smartt's lie about having a college degree material?

What was the percent increase in ticket price : The average NFL ticket price was $74.99 for 2009 and for 2005 it was $59.05.

Find the original price and discounted price of the movie : You know that a DVD is reduced 25% and the amount of reduction is $6.25.

Describe the components of the patient protection : Describes at least 8 key components of the Patient Protection and Affordable Care Act (PPACA), sometimes referred to as Obamacare.

Explain the elements of fraud : The salesperson had never seen the car before that day and knew nothing of its history. Nevertheless, the salesperson told Nicole,

User Account

All Pages