Durections: Sinlge space format, not an essay, number answers to match question number, answer each question separately, no price/time change, each answer needs to be about 6-8 sentences each
1. Given the current backlog of civil cases in our federal, state, and county court system, and the ever increasing cost of litigation, many people facing disputes among themselves or with various organizations are electing to go to alternative dispute resolution (ADR). The most common means of ADR are arbitration, mediation,and mini-trials (Judge Judy), but a number of other types ADR are available. Pursuing a major civil case in county court will probably take three Years to complete and cost as much as $100,000 or more. On the other hand, arbitration will probably take 60 days, and cost $30,000 - $50,000. So, you are facing a dispute with your former employer of 25 years, who is trying to deny you certain benefits that you gained legal title to (you think) over these years of employment.
- What choices do you have in pursuing your claim for past employment benefits?
- What are the various factors you need to consider in choosing a route to recovery?
- You are very confident you will prevail at the end of the process, and recover your benefits. So, what action do you pursue?
2. Review problem 23-13, found on page 670 of your eBook. Let's look at corporate malfeasance, both specifically as it is seen in the case of Mr. Bleakney and NMC, and more generally, at companies across the country. It seems as though there is an outbreak of corporate "bad ethics" that is translating into escalating costs for compliance and policing. Along with the SEC and their policing and efforts at ending bad business practices that relate to the stock market, we also have the Sarbanes-Oxley Act, also known as SARBOX, or SOX, which is becoming a big buzzword in the business world. We will look at that here and in the other topic. As part of that discussion, start thinking about the ways different officers of the company will look at and use or follow SOX (i.e., the CEO, CIO, and CFO).
• To start this discussion, let's look at the conduct of Mr. Bleakney: Was his conduct illegal under the Securities and Exchange Act, and more specifically, Section 10(b) and Rule 10b-5? If so, how? ? If his conduct was not illegal under Section 10(b) and Rule 10b-5, explain why not.
? Was his conduct unethical? Why or why not?
• If Mr. Bleakney is able to avoid prosecution under the 1934 Securities and Exchange Act, will he be subject to prosecution under Sarbanes-Oxley?
23-13
Ronald Bleakney, an officer at Natural Microsystems Corp. (NMC), a Section 12 corporation, directed NMC sales in North America, South America, and Europe. In November 1998, Bleakney sold more than 7,500 shares of NMC stock. The following March, Bleakney resigned from the firm, and the next month, he bought more than 20,000 shares of its stock. NMC provided some guidance to employees concerning the rules of insider trading, and the corporation said nothing about potential liability with regard to Bleakney's transactions. Richard Morales, an NMC shareholder, filed a suit against NMC and Bleakney to compel recovery, under Section 16(b) of the Securities Exchange Act of 1934, of Bleakney's profits from the purchase and sale of his shares. (When Morales died, his executor, Deborah Donoghue, became the plaintiff.) Bleakney argued that he should not be liable because he relied on NMC's advice. Should the court order Bleakney to disgorge his profits? Explain. Donoghue v. Natural Microsystems Corp., 198 F. Supp. 2d 487 (S.D.N.Y. 2002).
23-14
Northstar Financial invested some of the funds of its investors with Schwab Total Bond Market Fund, a fund registered with the SEC under the Investment Company Act. In compliance with the Act, Schwab stated its investment policies in its registration statement. In violation of the Act, it changed its investment strategy from what was stated in its registration statement. Because of this change in investment strategy, the company lost significant money when the housing market imploded, so Northstar Fund filed a class on behalf of its investors against the Schwab Fund for violating the Investment Company Act.. The Fund filed a montion to dismiss the suit on grounds that there was no private action available under the Act, and the District court rejected the motion. The Schwab Fund appealed the dismissal. How do you think the Court of Appeals ruled and why? Northstar Financial Advisors v. Schwab Investments, 615 F.3d 1106 (2010 WL 3169400, 9th Cir., 2010).