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Category: Business
A Question of Ethics—Violations of the 1934 Act. Melvin Lyttle told John Montana and Paul Knight about a "Trading Program" that purportedly would buy and sell securities in deals that were fully insured, as well as monitored and controlled by the Federal Reserve Board. Without checking the details or even verifying whether the program existed, Mont...
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Category: Business
Business Case Problem with Sample Answer— Disclosure under SEC Rule 10b-5. Dodona I, LLC, invested $4 million in two securities offerings from Goldman, Sachs & Co. The investments were in collateralized debt obligations (CDOs). Their value depended on residential mortgage-backed securities (RMBSs), whose value in turn depended on the performance of...
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Category: Business
A Question of Ethics—Violations of the 1934 Act. Melvin Lyttle told John Montana and Paul Knight about a "Trading Program" that purportedly would buy and sell securities in deals that were fully insured, as well as monitored and controlled by the Federal Reserve Board. Without checking the details or even verifying whether the program existed, Mont...
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Category: Business
Violations of the 1934 Act. To comply with accounting principles, a company that engages in software development must either "expense" the cost (record it immediately on the company's financial statement) or "capitalize" it (record it as a cost incurred in increments over time). If the project is in the pre- or post-development stage, the cost must...
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Category: Business
Insider Trading. Jabil Circuit, Inc., is a publicly traded electronics and technology company. A group of shareholders who owned Jabil stock from 2001 to 2007 sued the company and its auditors, directors, and officers for insider trading. Stock options were a part of Jabil's compensation for executives. Sometimes, stock options were backdated to a ...
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