Author Question: Lund was the CEO of Verit Co Lund was contacted by Horowitz, the CEO and Chairman of the Board of P ... (Read 67 times)

OSWALD · **on:** Jun 24, 2018

Lund was the CEO of Verit Co Lund was contacted by Horowitz, the CEO and Chairman of the Board of P & F. Horowitz told Lund of an opportunity P & F had to buy into a Las Vegas casino. Lund immediately purchased 10,000 shares of P & F. Three days after Lund's purchase, P & F announced its intentions to enter into a joint venture for a Las Vegas casino. Lund was then able to sell his shares for considerable profit. Discuss the propriety of Lund's actions under the 1934 Act.

Question 2

Gwen Knight is a CPA who works in the internal controls area of Winthrop Industries, a NASDAQ company. Gwen has discovered that there are problems with the company's processing of invoices for payments that allow the postponement of those payments. The company is 18 months behind on some payments. Gwen reports the problems to her supervisor. Gwen assumes that her supervisor will notify the head of internal audit and take the appropriate corrective steps. On her next performance evaluation, done three weeks later, Gwen receives her first poor rating in 10 years. She is put on a six-month performance improvement plan. Discuss Gwen's position, rights, and any protections she may have.

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

Answer to Question 1

Lund is a tippee. There is a 10(b) violation. SEC v. Lund, 570 F.Supp. 1397 (C.D.Cal.1983).

Answer to Question 2

Gwen works for a publicly traded company and so is protected by the anti-retaliation provisions of SOX. It seems that she has been targeted for raising an issue on financial reporting. Gwen has the right to file a complaint for retaliation.