Scenario III—Insider Trading During a session with her doctor, Billy Mooney, Mag

Question

Scenario III—Insider Trading

During a session with her doctor, Billy Mooney, Maggie Mason mentioned in confidence the imminent merger of Walgreens with Rite-Aid. Mason's ex-husband, Gus Mason, was on the board of directors at Walgreens. Mooney communicated the information to a securities broker, Olive Green, who immediately made trades in Walgreen’s securities for her own account and for her customers' accounts.

Did Mooney, Maggie Mason, Gus Mason, or Olive Green engage in illegal insider trading? Explain the potential culpability of each party. Include possible civil or criminal penalties for each party.

Was the conduct of the parties ethical?

Explanation / Answer

Yes, they were involved in insider trading.

Maggie Mason: She was culpable because the potential merger was a sensitive information which she has learnt maay be from her ex-husband and she should not have divulged the details to any peson.

Billy Mooney is culpable since he communicated the sensitive information to a broker and got benefits out of it.

Olive Green is a securities broker and she cannot be made culpable because dealing with securities is what she does and she has just carried out her customers order.

Conduct of Billy Mooney and Maggie Mason was not ethical. Even Olive green can be held accountable for unthical conduct since she knew it was an insider information.

Criminal penalties can apply to Billy and MAggie since they have made use of senstive information.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.