ESSAY QUESTION- BUSINESS LAW
- Jetco, a corporation whose stock is traded on a national stockexchange, has 200,000 shares of common stock outstanding that is at$20 per share. Dan owns 100 shares of Jetco stock and is a memberof the board of directors of Jetco. Five months ago, Dan learnedthat Jetco has developed a secret new invention to convert organicwaste into commercial jet fuel and that a public announcement wassoon to be made. Dan immediately emailed all three of Jetco’sshareholders whom he knew had previously announced a willingness tosell shares for $2 per share. Dan offered the shareholders $5 pershare. They accepted his offer and sold him 400 shares ofstock.  Dan also had been previously given a stockoption allowing him to purchase an additional 1000 shares ofun-issued Jetco stock from the company for $1 per share at somepoint within the next year. He exercised this option and purchasedthe shares for $21 per share from the company. Â
One week later the news conference is held and Jetco Stockalmost immediately doubles in value. The next day Dan sold his 4200shares and his 1000 shares at $50 per share.
Evaluate Dan’s potential liabilities, both criminal liabilityfor securities law violations and civil liabilities to thecorporation and the other shareholders.
