directors and officers who exploit their positions for personal gain are violating the?

a. business judgment rule
b.fairness rule.
c.insider trading rule
d. corporate opportunity doctrine

I am fighting between C and D and not sure which one it is. But I am leaning a bit more toward C because it seems as if directors would profit from the insider trading the most. Please help?

Isn't C just a part of D?

To be honest with you, I have no idea. However, here is what my book says:

Insider trading rule: manager possesses inside information not available to outsiders. Manager must either reveal the information or refrain from trading on that information.
Corporate opportunity doctrine: manager learns of business opportunity that might reasonably interest the corporation. manager must offer the opportunity to the corporation before taking it for personal gain.
What do you think?

To determine which answer choice is correct, it's important to understand the definitions and scope of each option:

a. The business judgment rule: This rule is a legal principle that provides protection to directors and officers of a corporation who make informed and reasonable decisions in the best interest of the company. It assumes that directors and officers act in good faith and with due diligence.

b. The fairness rule: This is not a commonly known or recognized rule in corporate governance. It does not specifically address the issue of exploiting positions for personal gain.

c. The insider trading rule: Insider trading refers to the illegal practice of trading securities based on material non-public information. While insider trading is a violation of securities laws, it does not directly address the issue of directors and officers exploiting their positions for personal gain.

d. The corporate opportunity doctrine: This doctrine provides that directors and officers owe a fiduciary duty to the corporation, requiring them to act in the best interest of the company and not to exploit corporate opportunities for their personal benefit without first offering them to the corporation.

Based on the information provided, the correct answer is d. the corporate opportunity doctrine. This doctrine specifically addresses the situation where directors and officers exploit their positions for personal gain by not offering corporate opportunities to the company before taking advantage of them.

While insider trading can be a violation committed by directors and officers, it is a separate offense and not specifically related to exploiting positions for personal gain.

Therefore, in this scenario, it is appropriate to choose d. the corporate opportunity doctrine as the violation that occurs when directors and officers exploit their positions for personal gain.