Task: Please read the statement in quotations then answer the questions below.
1) "By trading on the material nonpublic information he heard and saw, Haim allegedly breached his duty of trust and confidence that he owed to the relative."
There are many other insider trading stories. However, does this also apply to companies overseas? What does a country do overseas if this happened?
2) "Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security."
What are the consequences if found liable for insider trading? Do you think the consequences are harsh or should be harsher? Why or why not?
3) "Woody Pulp, the chief executive officer of Pacific Paper Products, Inc. use to sent annually a birthday card and bottle of Californian wine on birthday of his long lasting friend, who is the Director of Government Procurement for the Japanese government, as a token of love and friendship thus it cannot be considered as an offensive behavior because nature of the gifting is more or less personal rather than professional."
However, does the law really care if you are a "long lasting friend". Why or why not? What standard does the law use?
4) "A political risk mitigation policy should not be focused on decision of entering or avoid entry in marketplace, but it should be focused on proactive use of contingency policy, securing intellectual property rights, risk diversification, effective exit plan to safeguard against uncertainty. Political risk mitigation is supposed to be planned and achieved before, during and after an investment."
Good advices. However, let's use an example to flush this concept out. The US imports many products from Mexico. With the current unrest in Mexico, how should a company proceed? What if the company wanted to make their products in one of the many maquiladoras? Thoughts?