A broker is a person engaged in the business of buying and ...

[Medesa]

A broker is a person engaged in the business of buying and selling securities for their own account.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Business Judgment Rule. The board of directors of Baltimore Gas and Electric Company (BGE) recommended a merger with Potomac Electric Power Company (PEPCO). After full disclosure, the BGE shareholders approved the merger. On the ground that each BGE director stood a chance of being named to the new company's board, Janice Wittman, a BGE shareholder, filed a suit in a Maryland state court against the directors, alleging, among other things, that they were prohibited from deciding whether to recommend the merger. Did the directors breach their duty of care by voting in favor of the merger? How should the court rule? Discuss.

[rleezy04]

Answer to Question 1

FALSE

Answer to Question 2

Business judgment rule
The court concluded in part that Wittman failed to state a claim for breach of the duty of care. The court stated that she did not allege facts sufficient to overcome the presumption of correctness afforded    by the Business Judgment Rule. Also, there was, as a matter of law, full disclosure or sufficient disclosure. On Wittman's appeal, the state intermediate appellate court affirmed the lower court's judgment. The appellate court noted that there is a presumption that corporate directors act in the best interest of their corporation and that a challenger to the directors' actions must prove any wrongdoing. Here, there is simply no evidence that appellees failed to act in good faith. The court concluded that the fact that many of the appellees were likely to become directors of the new corporation did not justify judicial intervention.