Question - Lou Hoskins is the CFO of Gold Coast Mining Corporation. Preliminary analysis of the current quarter's financial statements shows a significant decrease in the company's profitability. Lou owns a significant amount of Gold Coast Mining Corporation's stock and is afraid that the value of the stock will decrease after the financial statements are released to the public. In an effort to mitigate his losses, Lou sells half of his stock before the statements are released to the public.
1. Discuss whether or not Lou's actions are ethical.
2. Are there any potential consequences to Lou's actions and if so, who would be affected by these consequences?