Question

Bosco Pharmaceutical has successfully developed a cancer drug for pancreatic cancer. The drug which has been...

Bosco Pharmaceutical has successfully developed a cancer drug for pancreatic cancer. The drug which has been in research and development for decades, but now has made a major break though. It has been improved by the Food and Drug Commission. Scott Hamilton is a major stockholder of the company and is on the Board of Directors of Bosco Pharmaceutical. He knows that when this drug hits the open market, the stock of Bosco Pharmaceutical will skyrocket. He has his father-in-law buy a huge amount of Bosco Pharmaceutical stock on his behalf before the announcement is made public.

Troy Smith is the controller for Bosco Pharmaceutical and is aware of the situation. Troy has decided to leave the company.   Do you feel that Scott Hamilton is doing the right thing and what do you think Troy Smith should do about this situation? Please respond in detail about both individuals in this ethical case.

Homework Answers

Answer #1

This is a Situation of Insider Trading Activity

Scott Hamilton act of leaking the information to his Father- in - law to buy huge stocks of Bosco Pharmaceuticals is an unethical Activity & considered as Insider Trading. Scott put his own benefit first than the companies benefit.

Troy Smith, the controller even after knowing the entire Sitution didn't informed to the regulation authority & just left the organisation. He should have Whistleblowed the Entire situation. Leaving the organisation is not a right thing by Troy.

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