Bus Law II Chapters 21 & 22

An antitrust action is brought against Carrier Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Carrier's attempt must have

a dangerous probability of success

Grip-All Tires, Inc., conditions the sale of one of its products on Harvey's Service Stores agreeing to buy another of Grip-All's products. This deal is legal

a depending on its purpose and the effect on competition

Social Media Sites Corporation is required to file a registration statement with the Securities and Exchange Commission. This statement must contain

a description of securities being offered for sale

As part of a stock offering for Designer Studio Corporation, the firm's accountant Evelyn intentionally misrepresents material facts in the prospectus. Flores buys the stock unaware of the misrepresentation and suffers a loss. Evelyn may be subject to

a fine, imprisonment, and damages.

Fresh Vegetables, Inc., and other wholesalers refuse to sell their produce to Good Foods Marketplace, Inc., a retailer. This is

a group boycott

Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is

a horizontal market division

Frictionless Lubricant Corporation and Grease, Inc., are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this is most likely

a per se violation

Bodycare Corporation makes and sells ChemMed, the most prescribed name-brand blood pressure-lowering medication. Deja Vu Drugs, Inc., has the potential to make a generic version of the same drug. A court would most likely rule that the agreement between Bodycare and Deja Vu is

a per se violation of the Sherman Act

Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other petroleum products. To limit the supply of gas on the market and thereby raise prices, Thermo Gas and Uno Oil agree to buy "excess" supplies from dealers and "dispose" of it. This is

a per se violation of the Sherman Act

Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and

a products that are reasonably interchangeable

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with

a prospectus

Agreements that are deemed per se violations of Section 1 of the Sherman Act include all of the following except

a trade association

Clear View Corporation offers to sell its flat-panel display monitors to Best Computer & Video, Inc., only if Best agrees to buy Clear View's servicing of its products along with the monitors. This is

a tying agreement

Speedee Snoboards, Inc., refuses to sell its products to Timber Mountain WinterSports Stores, Inc., a retail snowboard dealership. This is

a unilateral refusal to deal

Glassworx Corporation has exclusive control over the market for its products. Under antitrust law, this is

a violation if it intentionally acquired this power through "anticompetitive means."

To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is

a violation if the firm thereby acquires monopoly power

NuTrend Clothing Corporation is a public company whose securities are traded among investors. Under the Securities Act of 1933, a security is

almost any stake in the ownership or debt of a company

Congress enacts a statute to outlaw a specific type of anti competitive business agreement. Like other laws that regulate economic competition, this law is referred to as

an antitrust law

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation—a maker of fire trucks—on Quality's agreement to buy pumps only from Pump Makers. This is

an exclusive-dealing contract

North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely

an illegal restraint on trade

Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle Ranch's state is like the law in most states. Cattle Ranch's offer is subject to state securities statutes that include

antifraud and disclosure provisions.

Nick, a salesperson for Olive Grove Corporation, learns that Olive Grove will increase the dividend it pays to shareholders. Nick buys 10,000 shares if Olive Grove stock. When the dividend is announced to the public and the price of the stock increases, Nick sells his shares for a profit. Nick would not be liable for insider trading if the information about the dividend was

available to the public before Nick bought the stock

Adrian, the chief executive officer of Beds & Sofas, Inc., intentionally understates the amount of Bed & Sofas' debts in information provided to investors as part of an issue of Beds & Sofas' stock. Cassie buys the stock and suffers a loss. Adrian may be subject to

criminal prosecution and Cassie's suit

Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must

file a registration statement with the SEC

To raise $120 million to expand operations, Premiere Movies Corporation makes a stock offering to sixty accredited investors and twenty sophisticated, but unaccredited investors. Premiere Movies plans to notify the SEC of sales. Under the Securities Act of 1933, This issue will most likely qualify as an 'exempt' transaction

if all of the investors are also given material information about the firm, including its most recent financial statements

By contract, Oil Shale Corporation forbids Petro Refining, Inc., a wholesale buyer of Oil Shale's products, from purchasing the products of its competitors. This exclusive-dealing contract is not permitted

if its effect is substantially lessen competition

Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Sections 10(b) of the Securities Exchange Act of 1934 applies to the purchase or sale of a security

in almost any circumstances

HVAC Heating & Air Conditioning, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that HVAC's financial results are accurate and timely, the firm's senior officers must set up and maintain

internal "disclosure controls and procedures.

Discount Retail Corporation may be engaging in conduct that violates the Sherman Act. To bring an action against the firm requires that its conduct have a significant impact on

interstate commerce

Dhani, an accountant for Eureka! Inc. learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to Fay, who tells Geoff. Both Fay and Geoff buy 100 shares. Geoff knows that Fay got her information from Dhani. When Eureka! publicly announces its new laptop, Dhani, Fay, and Geoff sell their stock for a profit. Under the Securities Exchange Act of 1934, Geoff is most likely

liable for insider trading

Sunrich Company can process solar energy into an inexpensive fuel for internal combustion engines. As an innovator in its market, Sunrich currently has the power to affect the price of its product. This is

market power

Earthgrown Flora, Inc., is one of many producers of cut flowers. Earthgrown refuses to sell its products to Florist Shops Corporation. Under antitrust law, this refusal is normally

not a violation

Eddie, an accountant for Fresh Dairy, Inc., learns of undisclosed company plans to market a new smooth-tasting, fat-free butter. Eddie buys 10,000 shares of Fresh Dairy stock. He reveals the company plans to Giselle, who buys 5,000 shares. Giselle tells Hong, who tells Irwin, each of whom buy 1,000 shares. They know that Giselle got her information from Eddie. When Fresh Dairy publicly announces its new product, Eddie, Giselle, Hong, and Irwin sell their stock for a profit. If Eddie is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of Fresh Dairy stock was

not yet public

To prevent its competitors from obtaining sufficient supplies to make their products, Continental Steel, Inc., uses its market power to increase the prices of those supplies. This is

predatory bidding

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is

predatory pricing

To drive its competitors out of a certain geographic of its market, Drone Drives, Inc., sets the prices of its products below cost for the buyers in that area, this is

predatory pricing

Bodycare Corporation makes and sells ChemMed, the most prescribed name-brand blood pressure-lowering medication. Deja Vu Drugs, Inc., has the potential to make a generic version of the same drug. Bodycare pays Deja Vu not to sell its product. thereby restricting output. This is

price-fixing agreement

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider

the effect of the agreement on international trade

Rico does not work for Street Bikes Company, but wrongfully obtains inside information concerning the firm. Based on the information, Rico buys and sells Street Bikes stock for personal gain. The Securities and Exchange Commission prosecutes Rico, arguing that he is liable because he stole information rightfully belonging to another. This argument is

the misappropriation theory

A suit is filed against AgriSeeds Corporation, alleging that the firm committed the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at

the relevant market

Space Trips Inc. files a registration statement with the SEC before making an offering to the general public. The registration contains false, immaterial statements of which the investors are unaware. Space Trips is charged with violating the Securities Act of 1933. Space Trips's best defense is

the untrue statements were not material.

Guitar Factory Corporation files a registration statement and delivers a prospectus to the appropriate parties. These items are intended to enable the evaluation of certain financial risks by

unsophisticated investors

Sun & Ski Corporation is poised to issue securities that, under the Securities Act of 1933, are "exempt." This means that the securities can be sold

without being registered