Which of these parties could have tipper or tippee liability

Reference no: EM133719194

Discussion Post: Insider Trading Scenario Case Study

Review the summary of United States v. Newman, 773 F.3d 438 (2d Cir. 2014) in Chapter 45 of the course textbook.

Review Chapter 45 of the course textbook.

Review the following scenario.

Ken Hastings is hosting a backyard cookout for some of his neighbors. One of the invitees is Steve Chen, whose wife, Judith Chen, is the CEO of New World Industries. During the cookout, Steve received a call from his wife, who is out of town on business.

Upon returning to the barbecue after the call, Steve's demeanor has clearly changed and he seems unusually happy. Ken and Tim Daniels listen to what Steve reports. Steve tells his neighbors that Judith was out of town working on a very important settlement, and that her efforts have paid off.

Assume Ken Hastings (cookout host) and Tim Daniels (Ken's tennis partner) both bought stock in New World Industries as soon as the market opened on Monday and all profited 30% after the press announcement by Mrs. Chen. Pursuant to their agreement, Tim Daniels paid Ken Hasting 5% of the profit he made on the transaction.

1) With regard to Judith Chen, Steve Chen, Ken Hastings and Tim Daniels, which of these parties could be considered an "insider" under rule 10(b)(5) of the Securities Act of 1934? Explain why or why not.

2) Which of these parties could have tipper or tippee liability in this case?

3) Did Judith Chen's actions in telling her husband about the settlement breach her fiduciary duty?

4) Who actually obtained a personal benefit from the tip and how?

Reference no: EM133719194

Questions Cloud

Research another happening by a different artist : Describe a one-time performance that was considered art - Does the artist lose control of the work when inviting the audience to perform or can they sway

What does anderson mean that it is technical vocabulary : IRLS 210 American Public University Systems- What does Anderson mean that it is technical vocabulary and that liberals are not necessarily unrealistic?

Briefly explain the concept of leadership and its role : MGT324 Public Management - Leaders are born, not made." In light of this statement, briefly explain the concept of leadership and its role in organizational

What is your favorite way to define attention : What is your favorite way to define attention? Describe early selection model and late selection model of attention. What are key similarities and differences?

Which of these parties could have tipper or tippee liability : Which of these parties could have tipper or tippee liability in case? Did Judith Chen's actions in telling husband about settlement breach her fiduciary duty?

Would you be satisfied to meet the epa required level : Would you be satisfied to meet the EPA required level or would you install the additional controls you believe necessary to achieve a reasonably safe level?

Which performed best on risk-return basis during the period : What are the average monthly returns and standard deviations for each of the ETFs? Which performed best on a risk/return basis during this period?

What are the three types of cross pollination : Whats cross pollination in relation to plants and animals and What are the three types of Cross pollination

Have you reflected on what philosophical thinking means : Have you reflected on what philosophical thinking means to you? Have you reflected on how the ideas of the ancient Greek philosophers can impact your own views

User Account

All Pages