Go to this text’s Web site at www.cengage.com/ blaw/clarkson and select “Chapter 42.” Click on “Video Questions” and view the video titled Real World Legal: Jack’s Restaurant, Scene 1.

Then answer the following questions.

(a) Assuming that the companies involved in the merger are Section 12 companies, what statutory provisions prohibit Susan from trading company stock based on her inside knowledge of the merger with GTS?

(b) Did Susan breach a fiduciary duty to the corporation by telling the bartender about the proposed merger?
Does the fact that she may be laid off by the company after the merger affect her duties? Explain.

(c) Under what legal theory might it be illegal for the bartender to buy shares in the company based on the information that he got from Susan? Analyze the owner’s potential liability. Is there enough evidence of scienter in this scenario for the Securities and Exchange Commission to fi le criminal charges against Susan if the bartender buys the stock?
Discuss.