Author Question: Chiarella worked at a company that printed financial documents. In one documents, he read ... (Read 187 times)

Awilson837 · **on:** Jun 24, 2018

Chiarella worked at a company that printed financial documents. In one documents, he read confidential information that allowed him to buy stock and make a nice profit because of his knowledge. When sued by the SEC for insider trading, the Supreme Court found Chiarella:
a. guilty of violating Rule 10(b)-5 because he failed in his duty to disclose relevant information b. guilty of violating Rule 10(b)-5 because he traded in securities based on inside information c. guilty of violating Section 16(b) because he engaged in short-swing trading for profit
d. not guilty of insider trading because he had no fiduciary duty not to use the information e. none of the other choices

Question 2

Performance. In May 1996, O'Brien-Shiepe Funeral Home, Inc, in Hempstead, New York, hired Teramo & Co to build an addition to O'Brien's funeral home. The parties' contract did not specify a date for the completion of the work. The city of Hempstead issued a building permit for the project on June 14, and Teramo began work about two weeks later. There was some delay in construction because O'Brien asked that no construction be done during funeral services, but by the end of March 1997, the work was substantially complete. The city of Hempstead issued a Certificate of Completion on April 15. During the construction, O'Brien made periodic payments to Teramo, but there was a balance due of 17,950, which O'Brien did not pay. To recover this amount, Teramo filed a suit in a New York state court against O'Brien. O'Brien filed a counterclaim to recover lost profits for business allegedly lost due to the time Teramo took to build the addition and for 6,180 spent to correct problems caused by poor craftsmanship. Which, if any, party is entitled to an award in this case? Explain.

TDubDCFL · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

d

Answer to Question 2

Performance
The court dismissed the complaint, finding that Teramo's performance was unsatisfactory from both a timely and skillful manner. The court also awarded O'Brien lost profits, due to construction delay, and 6,180 for damages due to faulty workmanship. A state intermediate appellate court reversed the decision of the lower court and remanded the case for the entry of a judgment for 11,770 in Teramo's favor. The appellate court noted that where a contract fails to state a date for the completion of a construction project, a reasonable time is implied. In this case, ignificantly, there was no clause in the parties' contract which made time of the essence and the defendant continued to make periodic payments to the plaintiff during the construction. The court added that some delay in construction was attributable to the defendant's request that no work at the premises be performed while funeral services were in progress. The court recognized that the defendant expended 6,180 to repair certain items which had not been properly completed in a workmanlike manner, but found that this constituted only a small portion of the project, and does not preclude the plaintiff contractor from recovering on the theory of substantial performance. The court stated that the appropriate measure of damages is the contract price less the cost of repairing the work improperly done. The court concluded that O'Brien's claim for lost profits was unsubstantiated and too speculative.