Business Law Insider Trading Discussion Each answer must be between 250-300 words. Discussion Question
1: What must directors do to avoid liability for honest mistakes of judgment and poor business decisions? What is the “business judgment rule” and how does it relate to directors and/or officers? What guidance does scripture provide for corporate directors and officers? Discussion Question 2: What is insider trading? What law(s)/court case(s) prohibit insider trading and why? A recent Securities and Exchange Commission (SEC) action highlights the need for regulated entities and public companies to have in place policies to prevent insider trading and to follow such policies. In July 2011, Janney Montgomery Scott LLC (Janney), a registered broker-dealer, settled an administrative proceeding in which the SEC alleged that Janney willfully violated section 15(g) of the Securities Exchange Act of 1934 the (Exchange Act), which requires registered broker-dealers to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information by such broker-dealers and their associates.
