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MARCH 2009 BUSINESS LAW CHAPTER 46 DEBRA BARONE ANSWERS TO QUESTIONS AND CASE PROBLEMS 1. The 1933 Act deals with the original distribution of securities that are issued by the corporation. The 1934 Act deals with the secondary securities such as the New York Stock Exchange and the American Stock Exchange. 2. The SEC feels that these investors can evaluate the securities themselves since they are accredited. 3. First of all, the fact that Falcone paid $200 to Strath proves that he was aware he was receiving “tips”. Savage was not supposed to release this confidential information so he was in breach of duty to the newspaper. I would definitel decide against Falcone. 4. MPRL did not give false information about the drug; they stated that the results MAY or MAY NOT cure prostrate cancer. Tuttle took the statements and gambled that the stock would do well. He can not blame MPRL. 5. Yes, they must pay the corporation their profits. Since these people are officers of the corporation, they can not make such profits. Also, Winfried owns more than 10%, so he must pay the corporation as well. McCarthy, being a secretary, may keep her profit. This is stated in 16(b) of the 1934 act. 6. The court claims that these statements were misleading as there ws no way a systematic implementation could take place since there was no operating system in place. 7. Needleworth purchased stock based on a tip, on insider information. Mary Dale could be held liable as well as she is the one who tipped him off. Now Stone, by joking, showed reckless behavior and he could be held liable as well. 8.
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This note was uploaded on 04/22/2011 for the course FINANCE BUSINESS L taught by Professor Daviddubois during the Spring '09 term at SUNY Empire State.

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