Insider trading is legal if the CEO purchases a thousand shares of the stock of a company.
It is also the same for employees who buy 500 shares in companies where they work. The
Securities and Exchange Commission needs to be notified of insider trading. However, not all
cases of insider trading are allowed under the law in the United States. The essence of this paper
is to deploy case laws and facts to analyze an instance of insider trading and a second case about
a child who drowned in a pool.
In the first scenario, the parents of the child who drowned in a pool will be successful in
holding Triathlon Training liable for the child's death. The parents will be successful because
there is negligence. Negligence is the failure to exercise appropriate and ethical care expected
among specified circumstances. In this case, all four elements of negligence are proven.
According to Hoondong (2016), the details of negligence are duty, breach, cause, and harm.
Commitment is a moral obligation or responsibility. Triathlon Training must take care of
children while they are in school. Adequate measures should be taken at the swimming pool. An
example of an action the institution should have made is hiring divers to keep watch and rescue
children on time in case of an accident — the other element of negligence seen as the cause. The
cause is a person or a thing that gives rise to an action.
The purpose of the accident was a pool owned by Triathlon Training. Enough measures
should be taken within the premises of the pool to make sure that children are safe. The third
element is the breach. The breach is a violation of law or duty. Triathlon Training violated its
responsibility as an institution to take care of the kids. The final element is harm. Damage is a
physical injury, deliberately inflicted. In this case, the accident that occurred was the death of a
child after drowning into a swimming pool. Armstrong is not liable in his capacity. This is
SCENARIO ANALYSIS 3
because Armstrong is just the owner of the institution, but the institution is on its own' another
individual.' The parents should sue the institution but not the owner. Although Armstrong is not
responsible, he would have protected himself against this type of potential liability by getting a
liability insurance cover. This case is similar to a lawsuit by Hoyem V. Manhattan School, where
a student left the school within school hours and was hit by a motorist. The school was charged
for negligent in supervision as per California law (22 Cal. 3d 512).
Rite-Aid sought a merger with Walgreens, and the information was distributed among
five persons. They included Olive Green, Gus Mason, Maggie Mason, and Billy Mooney. It is
imperative to find out if they were involved in insider trading since the situation surrounding the
issue was questionable. Maggie Mason mentioned the merger to her doctor, Billy Money, after
hearing it from her ex-husband, Gus Mason. Olive Green was a securities broker who listened to
the information from Billy Mooney. The securities broker traded in Walgreens Securities in her
account and those of her clients.
Insider trading might be legal or illegal, depending on the information surrounding it.
Legal insider trading is an act of a worker or individual within a company sharing trade secrets.
However, it is appropriate to share the information with the Securities Exchange Commission.
Contrarily, illegal insider trading is an act of sharing trade secrets to benefit from the information
at the cost of a company. An example is R. Foster Winans, who was a columnist on the Wall
Street Journal (United States v. Winans, 612). He wrote stories concerning trading in securities
and shared trade secrets. He was convicted alongside his roommate and prosecuted (Karmel,
2018). Thus, the parties involved in the current case have engaged in the illegal exchange of
trade secrets because of the similarities in information shared.
SCENARIO ANALYSIS 4
Hoondong Lee. (2016). Subjective elements Justifying of Criminal negligence. HUFS Law
Review, 40(4), 209-222.
Karmel, R. S. (2018). The Fiduciary Principle of Insider Trading Needs Revision. Wash. UJL &
Pol'y, 56, 121.
United States v. Winans, 612 F. Supp. 827 (S.D.N.Y. 1985).