BW resource corporation

Topics: Stock market, Stock, Corporate governance Pages: 3 (853 words) Published: January 21, 2014
 
Identify illegal and/or unethical conduct committed by the characters in the case, and theireffect on the price of the stock. CHARACTERS:Meng, a businessman and a newbie in the stock market put all his money in one investment.Though he opted to participate in the stock market to expand his business, he didn’t diversify in other companies, concentrating only in the BW Resources Corporation, not knowing that pricesof stocks are unstable. Bernie has been a profit-oriented person. What matters to him in histrade is the commission he received on his transactions of his clients. As a broker, he has theknowledge and material information about what is happening to the company but there was nocorporate disclosure between him and his client. Since Rene and his team are tasked to monitorthe stock market for trading anomalies, he has the authority to investigate the tradinganomalies and protect the investing public. The extraordinary constant price appreciation ofBW Resources Corporation catches his attention. On the other hand, he did not make any moveto disclose this information to the potential shareholders f the said company. James, on thecontrary, discloses his investigation regarding the stock price of the company on his clients. His judgment based on his own analysis is insufficient to prove that there is something wrongregarding the BW Resource stock price. Ben was intrigued about the BW Resources stock priceappreciation so he himself wants to be in the trading business. On the SEC decision resolving a disagreement between the government and some developers and members of capital markets regarding minimum public ownership of REITs:

"The REITs were intended not only to give tax incentives but also to widen public ownership of real estate investments. And that's why the law provides for the minimum public ownership and latest amendment to the rules require now that the public ownership should be at a minimum 40% initially, year after listing, and then will go up...
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