Chpt 27: CG - External

Question 1

What are the types of liability a corporation is subject to if it beaches legislative requirements

Answer 1

1) Criminal - Broke a law
2) Regulatory - Less serious government regulations
3) Civil - Liable for lawsuit

Question 2

What must the prosecution must prove to win a case?

Answer 2

The defendant has Mens Rea - that is the defendant had intention to commit a crime

Question 3

What are the three classes of offences the Supreme Court has defined

Answer 3

1) Mens Rea offenses - prosecution must prove mens rea
2) Offenses of Strict Liability - Regardless of whether mens rea is present, the defense is liable. Defendant must prove duty of care was met
3) Absolute Fault - Regardless of the circumstances, doing the act is an offense

Question 4

What happens if inaccurate information is made available to the secondary securities market?

Answer 4

Liable: The corporation, its directors, officers and influential insiders (or individual lawyers/accountants who are responsible for the reports)

Liable for: damages suffered by any shareholder or former shareholder

As long as: Information is left uncorrected

Defense: Due diligence was maintained, caps damages

Question 5

What is the directing mind principle?

Answer 5

Corporation has mens rea if a senior official/director had mens rea

Question 6

What happens if a crime was committed by a low level employee?

Answer 6

Considered not the corporation

Question 7

What is the new policies regarding establishing criminal intent?

Answer 7

1) Physical act and guilty mind can be two separate people
2) Guilty act can be committed by virtually anyone doing work for the company
3) Mens rea can be found in policy makers, senior officers or operational responsibilities

Question 8

Is Insider Trading a civil, regulatory or criminal offense?

Answer 8

All of the above

Question 9

What is whistle-blower retaliation?

Answer 9

Threatening, Disciplining, Demoting or Firing a whistle-blower

This is a criminal offense