NO Plaguarism

@ Ithe nel u toto rl Envi ro n m e nt court against the firm. Zucco claimed that it could show that there had been disagreements within Digimarc over its accounting. Is this sufficient to establish a violation of SEC Rule 10b-5? Why or why not? lZLLcco Partners, LLC y. /\oigi^orc Corp..552F.3d9B1 (9th Cir. 2009)l ( f+-:. nsider Trading. Jabil Circuit, Inc., is a publicly traded \--/electronics and rechnologr company headquartered in St. Petersburg, Florida. In 2008, a goup of sharehoiders who owned Jabil stock from 2001 to 2007 sued the company and its auditors, directors, and officers for insider trading. Stock options were a par-t of Jabil's compersaLion for executives. In some situatiors, stock options were backdated to a point ln time when the stock price was 1ower, so that the options were wofth more to certain company executives. Backdating is not illegal so iong as it is reported, butJabil did not repon the fact that backdating had occurred. Thus, expenses were under- reponed, and net lncome was overstated by millions of dol- lars. The shareholders ciaimed that by riggrng the stock pnce by backdating, the executives had engaged in insider trading and could pick favorable purchase prices and that there was a general practlce of selling stock before unfavorable news about the company was reported to the public. The share- holders, however, had no specific information about these stock trades or when (or even if) a particular executive was aware of any accounting errors during the time of any back- datlngpurchas.r t . to assen that iruidrji uading_had occurred tnder Rule 10b-5?. Why or whya o r? lE dw ard J. G o o drnan liJ e Inc ome Trust l. J abil #'Circuit,Inc., 594 F.3d 783 (I lth Cir. 20I0)l 24-8. Violations of the t934 Act. Matrixx lnitiatives, Inc., makes and sel1s over-the-counter pharmaceutical products. Its core brand ts Zicam, which accounts lor 70 percent of its sa1es. Matrlrx received reports that some consumers had lost their sense of smell (a condition called anosmia) after using Zicam Cold Remedy Four product liabiiity suits were fi1ed against Matrixx, seeking damages for anosmia. In public statements relating to revenues and product safety, however, Matrixx did not reveal this information. lames Siracusano and other Matrixx investors filed a sult in a fed- eral district court against the company and its execuLives under Section IO(b) ofthe Securities Exchange Act of 1934 and SEC Rule 10b-5, claiming that the statements were misleading because they did not disclose the information regarding the product iiability suits. Matrixx argued that to be material, information must consist of a statistically significant number of adverse events that require disclo- sure. Because Siracusano's claim did not a1lege that Matrixx knew of a statisticaliy significant number of adverse events, the company contended that the claim should be dis- missed. What is the standard for materiality in this context? Should Siracusano's claim be dismissed? Explain. lMatrax lnitiatives,Inc. y. Siracusano, _ U.S. _, 131 S.Ct. 1309, 179 L.Ed.2d 398 (201r)l 24-9. : j A Question of Edticg Violations of the l9l4 AcL Melyin llf;ll Ly ttle told I ohn Montana and P aul Knight ab out a " k ading - Program" that pur'portedly wouldbuy and sell secuities in deals that were fully insured, as well as monitored and controlled by the Federal Reset-ve Board. Without checlangthe details or even tteiJyingwhether the Program existed, Montana and l{night, with Lyttle's help, began to sell interests in the Program to irwestors. For aminimuminyestment oJ $1 mtllion, the inyestors were promked extraordrnary rates oJ return-Jrom 70 percent to as much as 100 percent per weeh-without nsh. They were told, among other things, that the Program would "utilize banhs that can ensure full bank integiQ oJ The kansaction whose undertahing[sJ are in complete harmony with international banhing ruLes and protocol and who [sicl gtarantee maximum secuity oJ a Funder Capital Plarement Amount." Nothingwas requiredbut the intestors' Junds andthar silence-the Programwas tobe hEt secret. Over afour- month peiod in 1999 , Montana raised approximately $23 million Jrom twenty-two investors. The promised gains did not aca1.Le, howeyer. lnstead, Montana, Lyttle, and l{night depleted the inves- tors' funds in htgh-nsh trades or spent the funds on themselyes. ISEC v Montana,464 F.Supp.2d772 (S.D.Ind. 2006)l l. The Securities and Exchange Commission (SEC) filed a suit in a federal district court against Montana and the others, seeking an injunction, civil penalties, and dis- gorgement (glvLng up) of profits with interest. The SEC alleged, among other things, violations of Section 10(b) of the Securitles Exchange Act of 1934 and SEC Rule I0b-5. What is required to establish a violation of these laws? Explain how and why the facts in this case meet, or fail ro meet, these requirements. 2. It is often remarked, "There's a sucker bom every mrn- ute!" Does that phrase describe the Programb investors? Ultimately about half of the lnvestors recouped the amount they invested. Should the others be considered at least partly responsible for their own losses? Why or why not? .r- Video Question. lock's Restauronl Scene L Access litMmtli 1 iEll *r. r,ede9 lsrng the instructions pror,rded below to answer dre toltowing questions. l. Assuming that the companies involved rn the merger are Section 12 companies, what statutory provisions prohibit Susan from trading company stock based on her inside knowledge of the merger wrth GTS? 2. Did Susan breach a fiduciary duty to the corporation by telling the bartender about the proposed merger? Does the fact that she maybe laid off by the company after the merger affect her duties? Explain. 5. Under what legal theory might it be iilegal for the bar- tender to buy shares in the company based on the infor- matlon that he got from Susan? Analyze the owner's potential liability Is there enough evidence of scienter in [his scenario for the Securities and Exchange Commission to hle criminal charges against Susan if the bartender buys the stock? Discuss. -To watch this video, go to wuwcengagebtain.com and reg- ister the access code that came with your new book or 1og in to your existing account. Select the hnk for either the "Busmess Iaw Digital Video Library Online Access" or "Business Law CourseMate," and then click on "Complete Video Lisl' to find the video for this chapter (Vldeo 76).