Professor Starcher.  Every business corporation is governed by a board of directors. A director occupies a position of responsibility unlike that of.

Slides:



Advertisements
Similar presentations
Governance & Operations of a Corporation UNIT 1, LESSON 1-6.
Advertisements

1 Tools of the Trade, Part I The Balance Sheet: Initial Financing – Investments by Owners CHAPTER F3 © 2007 Pearson Custom Publishing.
Chapter 19-Securities Securities Regulation Public Offerings of New Securities. zWhen “going public” there are many different types of securities that.
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 23 Securities Regulation.
Securities Act Secondary Distributions Insider resales - §2(a)(11) Broker as underwriter –“offers or sells for issuer icw the distribution” –"issuer" includes.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Chapter 41 Investor Protection and Online Securities Transactions.
Slides developed by Les Wiletzky Wiletzky and Associates Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany.
Chapter 12 The Stock Market. CHAPTER 12  Who are the owners of a corporation?  Stockholders (shareholders)  If a corporation does well financially,
© 2010 Pearson Education, Inc., publishing as Prentice-Hall 1 Section 16 of 1934 Securities Exchange Act Section 16(a) of 1934 Act defines any person who.
CHAPTER 12. Chapter 12Mugan-Akman Forms of Business Organizations Sole Proprietorship-natural person merchant General Partnership Limited Partnership.
Stockholder Rights and Corporate Governance Stockholders Corporate Governance Executive Compensation: A Special Issue Shareholder Activism Government.
Forms of Business Ownership ~ The Corporation ~ & ~ The Stock Market ~
© The McGraw-Hill Companies, Inc., 2004 Slide 12-1 McGraw-Hill/Irwin Chapter Twelve Financial Reporting and the Securities and Exchange Commission.
Click your mouse anywhere on the screen to advance the text in each slide. After the starburst appears, click a blue triangle to move to the next slide.
Investing: Taking Risks With Your Savings. Stocks are also known as securities As proof of ownership, you get a stock certificate Stocks What are they?
Chapter 12  Shareholders’ Equity. Chapter 12Mugan-Akman Forms of Business Organizations Sole Proprietorship-natural person merchant General.
Emerging Issues in Management (Mgmt 440) Professor Charles H. Smith Corporate Governance (Chapter 18) Summer 2009.
Crowdfunding Overview. Investor Protection vs Capital Raising.
© 2005 West Legal Studies in Business, a division of Thompson Learning. All Rights Reserved.1 PowerPoint Slides to Accompany The Legal, Ethical, and International.
COPYRIGHT © 2010 South-Western/Cengage Learning..
Limited Companies LTD and PLC What they are and the differences between them.
Investing In Stocks Chapter 31. Today’s Schedule Tuesday’s Quiz Review Tuesday’s Quiz Review Assignment of Homework Assignment of Homework Chapter 31.
Do Now  If you didn’t finish your study guide on Friday, come up and get it. Finish answering the questions. We will correct them in a few minutes. 
The Stock Market What you need to know to begin investing.
Financing, Investor Protection And Online Securities Offerings Chapter 21.
Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 46 Securities Regulation Twomey Jennings Anderson’s Business.
Chapter 33 Investor Protection and Online Securities Offerings.
Bell Ringer #1 Ch What is the difference b/w a savings account and a time deposit? 2. After the stock market crash of 1929, ___________________ was.
University of Palestine Legal Environment for Business BMGT 510 Assistant Professor Muhammad Abu Sadah.
Chapter 24 Investor Protection. 2 Chapter Objectives 1. Define what is meant by the term securities. 2. Describe the purpose and provisions of the Securities.
Prentice Hall © PowerPoint Slides to accompany The Legal Environment of Business and Online Commerce 5E, by Henry R. Cheeseman Chapter 27 Investor.
LS311 – Business Law I Seminar Presentation UNIT 9 Business Organizations Chapter 26: Corporate Directors, Officer, & Shareholders Chapter 27: Investor.
Business Law and the Regulation of Business Chapter 40: Securities Regulation By Richard A. Mann & Barry S. Roberts.
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 16 Regulation of Securities, Corporate Governance, and.
© 2004 West Legal Studies in Business, a Division of Thomson Learning 19.1 Chapter 19 Securities Regulation.
Service to Business Entities Texas Business Organizations Code Page 12.
Comprehensive Volume, 18 th Edition Chapter 48: Securities Regulation.
© 2013 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 23 Securities Regulation 1 Copyright © 2016 McGraw-Hill Education. All rights reserved.
The U.S. Securities and Exchange Commission (SEC).
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.17-1 Chapter 17 Investor Protection and E- Securities Transactions.
Chapter 41 Corporations: Securities and Investor Protection McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Insider Trading (Federal Law). Insider trading regulation in the US Classic insider trading: –Fraudulent silence under Section 10(b) –duty of trust or.
BY: FRANK J. BALL SR. ACC 260 Ethics in Professional Accounting.
Proprietorships, Partnerships, and Corporations Chapter 8 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
CHAPTER 8 – TYPES OF BUSINESS ORGANIZATIONS. SECTION 1 – SOLE PROPRIETORSHIPS  Characteristics of Sole Proprietorships (single person owned business)
Chapter 41 Investor Protection, E-Securities, and Wall Street Reform.
Insider Trading (Federal Law) Classic insider trading Tipping liability Outsider trading (misappropriation) Last updated 31 Mar 11.
Chapter 17.  The federal and state governments have enacted statutes that regulate the issuance and trading of securities  Primary purpose  To promote.
SECURITIES REGULATION SPRING 2006 January 10, 2006.
Read and Summarize Proceedings that allege breach of fiduciary duties of officers and directors to the corporation often are derivative actions, and actions.
MT310 – Ethics and the Legal Environment Seminar Presentation UNIT 8 The Shareholder Stakeholder.
Chapter 13-1 CHAPTER 13 CORPORATIONS: ORGANIZATION AND CAPITAL STOCK TRANSACTIONS Accounting Principles, Eighth Edition.
© The McGraw-Hill Companies, Inc., 2008 McGraw-Hill/Irwin Accounting For Equity Transactions Chapter Eleven.
ACC 544 EDU Empowering Inspiring/acc544edu.com
Securities Regulation
Key Concepts and Skills
Customized by Professor Ludlum December 6, 2016
Investing: Taking Risks With Your Savings
Insider Trading (Federal Law)
Stockholders’ Equity: Paid-In Capital
UNITED ADVISORY PARTNERS.
Chapter 38 Investor Protection and Online Securities Transactions
ACC 544 EDU Change The World /acc554edu.com
Corporations: Securities and Investor Protection
Stockholders’ Equity: Paid-In Capital
Chapter 46 SECURITIES REGULATION
CHAPTER 9 THE CORPORATE ORGANIZATION © 2013 Delmar Cengage Learning.
BLU #6 Corporations.
CHAPTER 11 PUBLIC CORPORATIONS AND SECURITIES REGULATIONS
Presentation transcript:

Professor Starcher

 Every business corporation is governed by a board of directors. A director occupies a position of responsibility unlike that of other corporate personnel. Directors normally serve for terms of one year. Officers and executive employees are hired by the board of directors. At a minimum, most corporations have a president, one or more vice presidents, a secretary, and a treasurer. Directors and officers are deemed to be fiduciaries of the corporation and its shareholders is one of trust and confidence.  Chapters: 26, 27

 Grand Metropolitan PLC (Grand Met) planned to make a tender offer as part of an attempted takeover of the Pillsbury Co. Grand Met hired Robert Falbo, an independent contractor, to complete electrical work as part of security renovations to its offices to prevent leaks of information concerning the planned tender offer. Falbo was given a master key to access the executive offices. When an executive secretary told Falbo that a takeover was brewing, he used his key to access the offices and eavesdropped on conversations; in this way, he learned that Pillsbury was the target. Falbo bought thousands of shares of Pillsbury stock for less than $40 per share. Within two months, Grand Met made an offer for all outstanding Pillsbury stock at $60.00 per share and ultimately paid up to $66 per share. Falbo made a profit of more than $165,000. The Securities and Exchange Commission (SEC) filed a suit in a federal district court against Falbo and others for alleged violations of, among other things, SEC Rule 10b-5. [SEC v Falbo, 14 F.Supp.2d 508 (S.D.N.Y. 1998)]  Under what theory might Falbo be liable? Do the circumstances of this case meet all of the requirements for liability under that theory? Explain. P 572 Remember to justify your answer using information from your reading an be sure to: 1. Examine the SEC Rule 10b Discuss whether or not Falbo was liable under the misappropriation theory. p 575

 Dale Emerson served as the chief financial officer for Reliant Electric Company, a distributor of electricity serving portions of Montana and North Dakota. Reliant was in the final stages of planning a takeover of Dakota Gasworks, Inc. a natural gas distributor that operated solely within North Dakota. Emerson went on a weekend fishing trip with his uncle, Ernest Wallace. Emerson mentioned to Wallace that he had been putting in a lot of extra hours at the office planning a takeover of Dakota Gasworks. On returning from the fishing t rip, Wallace met with a broker from Chambers Investments and purchased $20,000 of Reliant stock. Three weeks later, Reliant made a tender offer to Dakota Gasworks stockholders and purchased 57% of Dakota Gasworks stock. Over the next two weeks, the price of Reliant stock rose 72%  before leveling out. Wallace then so ld his Reliant stock for a gross profit of $14,400. Using the information presented in our reading material, answer the following questions:  1. Would registration with the SEC be required for Dakota Gasworks securities? Why or why not?  2. Did Emerson violate Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5? Pg 572  Why or why not?  3. What theory or theories might a court use to hold Wallace liable for insider trading?  4. Under the Sarbanes-Oxley Act of 2002, who would be required to certify the accuracy of financial  statements filed with the SEC?  In responding to the questions be sure to:   Analyze the rules that determine when issuing corporations must file a registration  statement with the Securities Exchange Commission.   Discuss the SEC rule 10b-5 and whether or not it applies to the above case. P 572   Discuss insider trading, tipping, and misappropriation. P 575   Examine the Sarbanes Oxley Act of p 579

 Langley Brothers, Inc., a corporation incorporated and doing business in Kansas, decides to sell no par  common stock worth $1 million to the public. The stock will be sold only within the state of Kansas.  Joseph Langley, the chairman of the board, says the offering need not be registered with the Securities  and Exchange Commission. His brother, Harry, disagrees. Who is right? Explain.  In responding to the question be sure to:   Discuss the exempt securities pursuant to the Securities and Exchange Act.   Determine whether or not Langley Brothers would be subject to registration requirements.