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I’ve read a question where you have to say who is liable for trading using inside information. It is in a case where shares have been bought on which people have made a profit. The person supplying the information knew about the great results of the company before they were published. These are the two instances:
1. When talking to a friend he told them about the soon to be published results and encouraged him to buy the shares.
2. At a dinner party with his brother he advised him to buy shares in the company but didn’t mention the results
It says that the friend would be liable but the brother wouldn’t. What is to stop the friend from claiming that he was not told about the soon to be published results and just ‘advised’ like the brother was?
What you are saying is that this would be in a court of law so he would have to take an oath?
I’m not sure how they can prove it in order to get it to court in the first place as you could argue that it was a coincidence that somebody they knew bought the shares at that time (if one person).
No, what I am saying is that it would be lying and it’s wrong to lie! Ask George Washington.
If the friend were asked the question “Did you buy the shares as a result of a tip from someone who you believed was a person that knew unpublished price sensitive information about the company?” how could he deny it? That would be a blatant lie
How can you say that someone who would commit a crime like insider dealing in the first place would be honest about it?
Oh that’s easy! Watch! “Someone who would commit a crime like insider dealing in the first place would be honest about it”
There, no problem!
I believe that, if you listen to my recorded lecture on this (if I’m right, but I could be wrong) you’ll hear me say something like “A person that gets caught and successfully prosecuted for the crime of insider dealing deserves to lose their case!” and certainly, in the scenario that you quote, the guilty friend should be able to avoid successful punishment by, for example, claiming that information was never passed on but he could read the body language of his insider friend and thought that something good was on the near horizon. Or he could equally well have said that, although his friend advised him to buy shares, he never mentioned the imminent better-than-expected results
However, think about this! The insider is likely to be found guilty and, if that’s right, is he prepared to take the rap all alone? Is he not likely to say to his lying friend “Admit it, or I’ll tell them that I told you everything”
But Chloe, you’re facing an exam question here and the most unlikely things happen in exam questions. They are as likely to happen as the USA women’s football team scoring 4 goals inside the first 16 minutes of the women’s world cup final including the hat-trick goal for the captain being scored from the half-way line! It only happens in children’s story books
I love that exam question about a lady that wanted a wall built round her garden so that she wouldn’t be overlooking the local tip. The wall had to be 3 meters high but the builder finished it at a height of 2.5 meters and the tip was still visible.
The exam question was all about can she ask for the wall to be demolished and rebuilt to the correct height or could the builder refuse but only receive 5/6 of the contract price.
What was the problem with putting another half meter on top of the 2.5 meters?!!!!
Good to know that you’re enjoying the law 🙂
This does sound silly. You would think that they could work that one out!
It is proving highly entertaining 🙂
It is definitely not boring and I think you are doing a great job at making it fun!
I’ve got one for you that maybe you will know the answer to:
A new kebab shop is opening up so it has advertised in it’s window and on flyers that food purchased on the first day of opening will be half price all day. It gets to 6:30pm and they run out of food. For the people that come at this time and afterwards and cannot get any food are they able to ask for the same deal the next day?
I’m assuming that the kebab shop do not have to do anything as this was simply an offer?
Given that it is a takeaway you would think that they would have prepared for enough food for an evening.The advert is probably NOT an offer (which is what you have said) – its probably an invitation and not therefore capable of being accepted.
Sensibly the kebab shop owner should have written on the flyers “While stocks last” and then, even more sensibly, he should have started with minimal stock!
Oh yes, not an offer an invitation. I think that if you’re trying to lure in new customers this isn’t a great way to start off. The hungry and disgruntled public may not bother going there again.
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