The Legal Environment of Business: Text and Cases (MindTap Course List)
10th Edition
ISBN: 9781305967304
Author: Frank B. Cross, Roger LeRoy Miller
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 28, Problem 7BCP
Summary Introduction
Case summary: Company BACI provided services to small publicaly traded companies. Company CC sold customized USB drives. Company CC falsely informed BACI that it was awarded a contract of
To explain: The liability of BACI for a false statement made by CC.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Outline the ways the Securities Act has sought to fight insider trading.
When a corporation wishes to issue certain securities, it must provide sufficient information for an unsophisticated investor to evaluate the financial risk involved. Specifically, the law imposes liability for making a false statement or omission that is "material."
What sort of information would an investor consider "material" pursuant to the Securities Exchange Act of 1934? Be sure to explain the Act and provide two recent case examples where material representation or omission amounted to securities fraud in violation of SEC Rule 10b-5.
Heritage Loan Company extends credit in the ordinary course of its business. Under the Truth-in-Lending Act, Heritage must inform
potential borrowers of
credit terms offered by other lenders.
comparative prices for goods to be bought with the borrowed funds.
Heritage's credit terms.
Heritage's opinion of the borrower's ability to afford the goods to be bought with the borrowed funds
Chapter 28 Solutions
The Legal Environment of Business: Text and Cases (MindTap Course List)
Knowledge Booster
Similar questions
- The shareholders of Escalante company are suing the external auditors of the company. The shareholders are upset because the management of Escalante company produced overly positive financial statements and used these financial statements to lure new investors. Escalante company is now bankrupt, the managers are facing prison time, and the external auditors are in monetary damages settlement talks with shareholders of Escalante company. What role could the public company accounting oversight board (PCAOB) have played in avoiding this catastrophe?arrow_forwardThe Securities and Exchange Commission today charged Ernst & Young LLP (EY) forcheating by its audit professionals on exams required to obtain and maintain CertifiedPublic Accountant (CPA) licenses, and for withholding evidence of this misconductfrom the SEC’s Enforcement Division during the Division’s investigation of the matter.EY admits the facts underlying the SEC’s charges and agrees to pay a $100 millionpenalty and undertake extensive remedial measures to fix the firm’s ethical issues.“This action involves breaches of trust by gatekeepers within the gatekeeper entrustedto audit many of our Nation’s public companies. It’s simply outrageous that the veryprofessionals responsible for catching cheating by clients cheated on ethics exams ofall things,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division. “Andit’s equally shocking that Ernst & Young hindered our investigation of this misconduct. This action should serve as a clear message that the SEC will not…arrow_forwardConsidering the following statements true or false. 1.Circumstances whereby the CFA member breaches client confidentiality are acceptable in circumstances directed by the client in writing. 2.Mosaic theory damages the interest of all investors by disrupting the smooth functioning of forward markets and lowering investor confidence. 3.As a philosophical ethical principle, when analysing actions undertaken, it is acceptable that an act can be seen as good or bad regardless of the underlying/relevant circumstances. 4.As part of Standard IV, as a superior, it is not your responsibility to ensure ethical behaviour of your subordinates. 5.Premium investment services should be designed in such a way that, while beneficial to those who are in a position to take advantage of them, they are not unfairly disadvantages to other classes of clients.arrow_forward
- which is wrong The IPO tax applies only to the initial public offering of a closely held corporation. A sale is not subject to stock transaction tax if the shares were not listed and sold through the Philippine Stock Exchange (PSE). The sale, barter or exchange, including block sale, of listed stocks through the Philippine Stock Exchange (domestic or foreign stocks), other than by dealers in securities, is subject to a tax of 60% of 1% (6/10 of 1%) based on gross selling price. The sale, barter or exchange, including block sale, of listed stocks through the Philippine Stock Exchange (domestic or foreign stocks), other than by dealers in securities, is subject to a tax of 50% of 1% (5/10 of 1%) based on gross selling price.arrow_forwardIdentify and discuss U.S. federal laws that govern insider trading.arrow_forwardThe Federal Trade Commission (FTC) files suit against Yange Corp. under § 2 of the Sherman Act. To be successful, the FTC must prove that Yange Corp. possesses monopoly power in the relevant market and that the monopoly power was obtained by illegal means. The FTC has no direct evidence that Yange is using its power to control prices and restrict output. The FTC, therefore, must show that Yange Corp. has monopoly power indirectly, by showing that Yange Corp. has a dominant share of the relevant market and that there are significant barriers for new competitors entering that market. The FTC can calculate the market share that Yange Corp. has by: showing the total sales that Yange Corp. has ever had. × showing the net revenue that Yange Corp. had during their year of highest profits. looking at the company's sales compared against the total sales of the industry within a specific period. taking the total sales of the industry over one year, and comparing against industry sales over prior…arrow_forward
- Describe the role and workings of (1) the Consumer Product Safety Commission (CPSC) and (2) the Consumer Financial Protection Bureau (CFPB).arrow_forwardDiscuss the provisions of the Companies Act regarding the prevention of insider trading and market manipulation activities by company insiders.arrow_forwardRed Cross insurance company provide 8 million Americans with health-care financing. They paid millions of dollars for care attributable to illnesses related to tobacco use. In 1998, to recover some of this money, they sued the tobacco companies alleging fraud. They claimed that since 1953 the defendants conspired to addict millions of Americans to cigarettes and other tobacco products by misrepresenting the safety of nicotine and its addictive properties. The defendants’ success caused lung, throat, and other cancers, as well as heart disease, stroke, emphysema, and other illnesses to members of Red Cross plans, which Red Cross was required to pay. At trial, the defendants asked the court to dismiss the case on the ground that the plaintiffs did not have standing to sue. Does Red Cross have standing in this case? © a. No, Red Cross does not have standing because their claim should be filed against the insured who chose to smoke and risked these illnesses. b.…arrow_forward
- Suture Express was a new upstart specializing in the medical supply network by selling only sutures. Owens & Minor was a medical supply distributor that carried all types of medical supplies, including sutures. Owens & Minor began bundling provisions that required its customers to pay a premium for all medical products unless the customer agreed to purchase its sutures. Suture Express brought suit alleging a loss to Owens & Minor through anticompetitive practices. Is this a tying situation that violates federal antitrust laws? Why or why not?arrow_forwardBill was with his boss Mr. Big of Computer World Limited at the popular night club SHAG. His boss had alot to drink and was totally out of it. Mr. Big met Ms. Sandra a former model and introduced her to Bill. He told Sandra that Bill has the authority to act for him in any of the companies transactions. Bill in reality has never done so before. In fact Ms Sandra was quite aware of Bill’s status at the company as just a CSR and Mr Big rantings when he is drunk. Ms Sandra however colluded with Bill and entered into a contract for Computer World to purchase $1 million in printers from her. Can this contract with Ms Sandra be enforced based on an agency relationship between Bill and his Boss Mr Big? Discuss with supporting case law. using the IRAC methodarrow_forwardprinciples of SEC Code Governance that Enron Company has violatedarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
BUSN 11 Introduction to Business Student EditionBusinessISBN:9781337407137Author:KellyPublisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...BusinessISBN:9781337386494Author:Mary Ellen Guffey, Dana LoewyPublisher:Cengage Learning
Accounting Information Systems (14th Edition)BusinessISBN:9780134474021Author:Marshall B. Romney, Paul J. SteinbartPublisher:PEARSON
International Business: Competing in the Global M...BusinessISBN:9781259929441Author:Charles W. L. Hill Dr, G. Tomas M. HultPublisher:McGraw-Hill Education
BUSN 11 Introduction to Business Student Edition
Business
ISBN:9781337407137
Author:Kelly
Publisher:Cengage Learning
Essentials of Business Communication (MindTap Cou...
Business
ISBN:9781337386494
Author:Mary Ellen Guffey, Dana Loewy
Publisher:Cengage Learning
Accounting Information Systems (14th Edition)
Business
ISBN:9780134474021
Author:Marshall B. Romney, Paul J. Steinbart
Publisher:PEARSON
International Business: Competing in the Global M...
Business
ISBN:9781259929441
Author:Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher:McGraw-Hill Education