BA621-L9A2 - February 1, 2010 May 21, 2010 BA621 Business...

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February 1, 2010 – May 21, 2010 BA621 Business Law Lesson #9 Assignment #2 Lesson #9, Assignment #2: Critical Thinking About the Law Because securities can easily be manipulated by issuers, federal and state governments have strongly regulated the issuance and trading of securities. Studying the following case and answering some critical thinking questions about it (from page 641 of your text) will help you better appreciate the need for regulation of securities. Jessica received a phone call from a man claiming to represent Buy-It-Here, a corporation that was relocating to Jessica's town. The man stated that the corporation was planning to issue new securities, and he was extending this offer to residents in Jessica's town. He claimed that Buy-It-Here would easily double its profits in six months. The man said that if Jessica would send $3,000, he would buy stock in Buy-It-Here for Jessica. Jessica sent the money; two weeks later she discovered Buy-It-Here was in the process of filing for bankruptcy. 1) This case is an example of the need for government regulation. We want the government to protect citizens from cases such as Jessica's buying stock in a bankrupt company. If we
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BA621-L9A2 - February 1, 2010 May 21, 2010 BA621 Business...

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