Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Insider Trading. David Gain is the chief executive officer(CEO) of Forest Media Corp., which is interested in acquiringRS Communications, Inc. To initiate negotiations, Gain meetswith

Insider Trading. David Gain is the chief executive officer(CEO) of Forest Media Corp., which is interested in acquiringRS Communications, Inc. To initiate negotiations, Gain meetswith RS's CEO, Gill Raz, on Friday, July 12. Two days later, Gainphones his brother, Mark, who buys 3,800 shares of RS stock onthe following Monday. Mark discusses the deal with their father,Jordan, who buys 20,000 RS shares on Thursday. On July 25, theday before the RS bid is due, Gain phones his parents' home,and Mark buys another 3,200 RS shares. Over the next fewdays, Gain periodically phones Mark and Jordan, both of whomcontinued to buy RS shares. On August 5, RS refuses Forest'sbid and announces that it is merging with another company.The price of RS stock rises 30 percent, increasing the value ofMark's and Jordan's shares by nearly $660,000 and $400,000,respectively. Is Gain guilty of insider trading? What is requiredto impose sanctions for this offense? Could a court hold Gainliable? Why or why not

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Criminal Law

Authors: Matthew Lippman

3rd Edition

154435598X, 978-1544355986

More Books

Students also viewed these Law questions