business law

Dale Emerson served as the chief financial officer for Reliant Electric Company, a distributor of electricity
serving portions of Montana and North Dakota. Reliant was in the final stages of planning a takeover of
Dakota Gasworks, Inc. a natural gas distributor that operated solely within North Dakota. Emerson went
on a weekend fishing trip with his uncle, Ernest Wallace. Emerson mentioned to Wallace that he had
been putting in a lot of extra hours at the office planning a takeover of Dakota Gasworks. On returning
from the fishing t rip, Wallace met with a broker from Chambers Investments and purchased $20,000 of
Reliant stock. Three weeks later, Reliant made a tender offer to Dakota Gasworks stockholders and
purchased 57% of Dakota Gasworks stock. Over the next two weeks, the price of Reliant stock rose 72%
before leveling out. Wallace then sold his Reliant stock for a gross profit of $14,400.
Using the information presented in our reading material, answer the following questions:
1. Would registration with the SEC be required for Dakota Gasworks securities? Why or why not?
2. Did Emerson violate Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5?
Why or why not?
3. What theory or theories might a court use to hold Wallace liable for insider trading?
4. Under the Sarbanes-Oxley Act of 2002, who would be required to certify the accuracy of financial
statements filed with the SEC?

  1. 👍 0
  2. 👎 0
  3. 👁 254
asked by james
  1. Dale Emerson served as the chief financial officer for Reliant Electric Company, a distributor of electricity
    serving portions of Montana and North Dakota. Reliant was in the final stages of planning a takeover of
    Dakota Gasworks, Inc. a natural gas distributor that operated solely within North Dakota. Emerson went
    on a weekend fishing trip with his uncle, Ernest Wallace. Emerson mentioned to Wallace that he had
    been putting in a lot of extra hours at the office planning a takeover of Dakota Gasworks. On returning
    from the fishing t rip, Wallace met with a broker from Chambers Investments and purchased $20,000 of
    Reliant stock. Three weeks later, Reliant made a tender offer to Dakota Gasworks stockholders and
    purchased 57% of Dakota Gasworks stock. Over the next two weeks, the price of Reliant stock rose 72%
    before leveling out. Wallace then sold his Reliant stock for a gross profit of $14,400.

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. college

    Dale Emerson served as the chief financial officer for Reliant Electric Company, a distributor of electricity serving portions of Montana and North Dakota. Reliant was in the final stages of planning a takeover of Dakota Gasworks,

    asked by james on December 8, 2010
  2. Business Law

    Dale Emerson served as the chief financial officer for Reliant Electric Company, a distributor of electricity serving portions of Montana and North Dakota. Reliant was in the final stages of planning a takeover of Dakota Gasworks,

    asked by Jaime on April 27, 2010
  3. fin571

    B1. (Choosing financial targets) Bixton Company’s new chief financial officer is evaluating Bixton’s capital structure. She is concerned that the firm might be underleveraged, even though the firm has larger-than-average

    asked by Anonymous on November 20, 2010
  4. accounting

    Mikayla, chief financial officer of Napoli Chocolate Company, adopts religious ethical standards. These involve an element of

    asked by Anonymous on February 9, 2013
  5. English-Quote

    We come to them who weep foolishly, and sit down and cry for company, instead of imparting to them truth and health in rough electric shocks, putting them once more in communication with the soul.” Based on this quote, what can

    asked by hue on October 20, 2011
  6. business law

    •Do the company's actions fit the definition of a crime? If so, what kind, a felony or a misdemeanor? Why or why not? Articles: Ex-WorldCom Chief Ebbers Convicted of Fraud Reliant Energy Services, Inc. and Four of its Officers

    asked by Anonymous on July 28, 2010
  7. Business Ethics

    Which of the following is NOT one of the key requirements for auditor independence? A. Auditors must disclose all other written communications between management and themselves. b. Public accounting firms must report if they are

    asked by Simone on January 5, 2014
  8. Business 1

    Mikayla, chief financial officer of Napoli Chocolate Company, adopts religious ethical standards. These involve an element of A discretion. B cost-benefit analysis. C compassion. D utilitarianism. i would chose d

    asked by Anonymous on August 29, 2012
  9. business

    What are the advantages of having an ethics office or officer report to a company’s chief executive officer, the legal department, human resources, or audit? What are the disadvantages?

    asked by Priscilla on May 11, 2012
  10. medical info mangement

    please check my answer thanks True or False If John Dale is responsible for accounting services for Weston Hospital he's the hospital's chief fisnical officer. I picked True

    asked by alex on April 4, 2008

More Similar Questions