Legal&Ethical
Course: Legal & Ethical Environment
Professor: Dr. Libertella
Chapter 16 Business Ethics Perspective P419 1. Stewart was not an insider of ImClone and she received the tip from her stockbroker. Does she have an ethical obligation to ask where the tip came from or why the broker was recommending selling the stock? Does the fact that Stewart was an officer and director of a publicly traded corporation require her to use higher ethical standards when buying and selling stock of other companies?
Yes, she should have an ethical obligation to check the original place that the tip came from and the reason her stockbroker preferred her selling the stock. Even Stewart was not an insider of ImClone, she should know this tips definitely came from inside of the ImClone. Otherwise, there was no possibility for other people to know it. And she couldn’t use it to benefit herself. If a tip has some relationship with the inside-information of a public corporation, she is supposed to have a common sense of possibility of violating the rule 10(b)(5). Furthermore, Stewart was a leader of a public enterprise who should have responsibility for the society and use the higher ethical standards to regulate herself. Maybe her actions would affect the stock market easily.
2. Given the relatively small amount of money involved, do you think that Stewart’s sale manipulated the stock in a way that hurt other investors? Regarding the amount of the money that Stewart’s sale, her action had already violated the rule 10(b)(5), which had already hurt other investors. Even not in the monetary part, it broke the laws, already, after all.
3. When Faneuil was ordered to commit an illegal act by tipping Stewart, what were his options as a practical matter? If he was told to tip Stewart or he would be fired from his job, does that affect the ethical decision-making model? As a practical matter, it should be a hard dilemma for an employee. Ultimately, he stood by the
Professor: Dr. Libertella
Chapter 16 Business Ethics Perspective P419 1. Stewart was not an insider of ImClone and she received the tip from her stockbroker. Does she have an ethical obligation to ask where the tip came from or why the broker was recommending selling the stock? Does the fact that Stewart was an officer and director of a publicly traded corporation require her to use higher ethical standards when buying and selling stock of other companies?
Yes, she should have an ethical obligation to check the original place that the tip came from and the reason her stockbroker preferred her selling the stock. Even Stewart was not an insider of ImClone, she should know this tips definitely came from inside of the ImClone. Otherwise, there was no possibility for other people to know it. And she couldn’t use it to benefit herself. If a tip has some relationship with the inside-information of a public corporation, she is supposed to have a common sense of possibility of violating the rule 10(b)(5). Furthermore, Stewart was a leader of a public enterprise who should have responsibility for the society and use the higher ethical standards to regulate herself. Maybe her actions would affect the stock market easily.
2. Given the relatively small amount of money involved, do you think that Stewart’s sale manipulated the stock in a way that hurt other investors? Regarding the amount of the money that Stewart’s sale, her action had already violated the rule 10(b)(5), which had already hurt other investors. Even not in the monetary part, it broke the laws, already, after all.
3. When Faneuil was ordered to commit an illegal act by tipping Stewart, what were his options as a practical matter? If he was told to tip Stewart or he would be fired from his job, does that affect the ethical decision-making model? As a practical matter, it should be a hard dilemma for an employee. Ultimately, he stood by the