Giles and Modell Case
Essay Preview: Giles and Modell Case
Report this essay
In this case, Gries should have won. Modell already owned 80% of the Cleavland stadium and 53% of the Browns. Modell was wanting to sell the stadium for 6 Million, which is about 3 times the amount of what is fair. Modell requested this so he could get out of a personal debt. () This is a clear conflict of interest and a violation of the business judgment rule.

5: A-g:
a. Why might the corporation have to file for bankruptcy protection?
This corporation might have to file for bankruptcy protection due of lawsuits and tax problems. In this case, the company lied about their assets causing stock to drop which can result in a lawsuit. This is also extremely unethical.

b. What provision(s) of the securities law will probably be the basis for a class-action lawsuit by the stockholders?
The provision that could be used is that the company openly admitted to lying about the assets which caused their stocks to go down which as a result affected the stockholders.

c. Why will the 1995 Act probably not stop a class-action lawsuit from proceeding to the discovery phase?
The 1995 Act would most likely not stop a class-action lawsuit from proceeding because there is enough evidence to show that the company committed fraud as well as evidence showing deception.

d. Why will the CFO be subject to criminal (as well as civil) securities sanctions?
The CFO will be subject to criminal sanctions for willful (knowing and deliberate) violations of the provisions. He knew what he was doing and did it deliberately. Therefore he will be fined and jailed.

e. Will the SEC likely ever allow the CFO to be an officer or director of a publicly traded corporation in the future?
No due to the fact that the SEC has the power to prohibit violators from serving as officers or directors of publicly traded companies.
f. Will the SEC allow the CFO to keep the $10 million gain on the stock?
No because the SEC also has the power to force the defendant to give up ill-gotten gains, which in the case is the 10 million.
g. What kind of civil penalties could the SEC impose on the CFO?
The civil penalties that the SEC could impose on the CFO are to pay up to $750,000 and could force the defendant to give up ill-gotten gains.

Get Your Essay

Cite this page

Kind Of Civil Penalties And Civil Penalties. (April 2, 2021). Retrieved from