Business Law

Power buyer defense:

A merger that increases concentration to high levels can be defended by showing that the firm's customers are sophisticated and powerful buyers

Robinson-Patman Act

Admins Clayton Act, Price discrimination (sold to diff buyers at diff prices) , Predatory Pricing

Origins of International Law

Early trade customs centered on the Law of the Sea, Egyptian merchants involved in international trade

Remedies(AntiTrust)

FTC and Department of Justice

What act can private parties bring civil actions under?

Lanham Act

Which Antitrust Act carries the most severe penalty? What type of cases constitute most of the criminal cases?

Sherman Act (pricing or bid readers)

What act was passed in response to the unpopularity of large business organizations? Which Large business was the most famous?

The Sherman Act, weakened monopoly

Fair and Accurate Credit Transaction Act

amended the FCR Act in 2003 Ftc followed with Disposal Rule: requires consumers info to be disposed properly, hard drives, etc

The elements of a security, as the Supreme Court ruled in the SEC v. Howey (Howey Test) case include:

an investment of money in a common enterprise

Trade Regulation Rules: Used Car rule:

dealers must give clear info on who pays for repairs after sale, Buyers guide must be put in car window

A new or an existing company may be financed by:

debt and equity

What is the intent of the Clayton Act? What is the general meaning of monopoly?

intended to attack a business to prevent from becoming a monopoly. ..... one firm dominates th sale of a product/service

The idea behind the disclosure provisions contained in federal securities law is that:

investors need sufficient and accurate information on material facts concerning securities they might buy

A share of stock:

is a share in the future profits (if any) of a company

Rule of reason:

means that the court will look at the facts surrounding the business practice before decidng whether it helps or hurts the competition

International Court of Justice

part of the UN, made up of 15 judges from all of the world's major legal systems, only NATIONS have standing to go before the court, up to nation or pursue a claim

A proxy is best described as:

permission by a stockholder to someone else to vote their shares a certain way

The federal agency that has the most to do with regulation of the securities markets is the:

securities and exchange commission

Trade regulation Rules: R Value Rule:

standardize measures and terminology re:home installation

Truth in Lending Act

standardized loan forms to help customers understand financial charges, encourages consumers to shop around for credit. must list if have- loan fees and points, charges, fees

Under SEC rules, a "publicly held company" is a company:

that has issued securities that are publicly traded

Insider Trading is:

the buying or selling of stock by persons who have access to information, not yet revealed to the public, that affects the value of the stock

Corporate Social Responsibility

the idea that those who manage corps. should be accountable to society for their actions

6 guidelines for Ethical Business Decisions

the law rules and procedures values conscience promises heroes (role models)

Bans on certain products(International Law)

weapons, illegal products, narcotics, national security concerns, endangered species concerns

Utilitarianism

what produces the greatest good for the greatest number of ppl

Merger:

when 2 or more firms come together to form a new firm, built on court cases, DOJ & FTC

Deception:

1. Misrepresentation or omission of information 2. likely to mislead reasonable consumers 3. deception is material (Program, Scientific claims, backup?)

The Sherman Act

1890, way to reduce concerns that some industries were dominate by a few large firms, So broad, almost any business activity could be illegal, no restraint of trade Can't monopolize or attempt to monopolize

Moral Minimun & short run profit maximization

2 ways?

Which Federal Law regulates the initial offerings of Securities?

Securities Act of 1933

Principle of Rights

belief that every duty gives rise to a corresponding right, deeply embedded in western culture, Ethicality of an action is judged by how the consequences of the action will affect the rights of others

Securities provide __________ for business operations.

capitol

In Securities, which is a condensed version of the longer registration statement?

prospectus

Which of the following laws regulates the buying and selling of traded securities?

the 1934 Securities and Exchange Act

International contracts must take into account what?

Customs, languages, currency and exchange

Fair Debt Collection Practice Act

Eliminate unfair, deceptive, and abusive collection techniques, but permit reasonable collection practices (probz not) Restrictions imposed (no threats, etc)

The US uses a _____ tariff schedule. What is this?

Harmonized; Worldwide classification of goods for customs officials

Trade Regulation Rules: Main-order Rule:

Reasonable basis for expecting to ship products w/in time they say

Fair Credit Reporting Act

Regulates credit bureaus, see credit reports

Tariffs (2)

Specific: fixed duties on products Ad Valorem: % price of product

NAFTA

Trade Agreements (US, Mexico, Canada)

***Suppose there has been securities fraud in the preparation of materials sent to investors, who then lose money. Potentially, which of the following MAY be liable?

directors of the company and high-level officers of the company and accountants, lawyers and other professionals who helped prepare the material

Federal Trade Commission

enforce antitrust laws, devotes resources to the bureau of consumer protection(against unfair and deceptive acts in practice)

***Most securities are issued by well-known seasoned issuers who have the right to:

file registration statements the day they announce a new offering, use a free-writing prospectus that is continuously updated on a website

Failing Firm Defense:

if one of the firms involved in a merger has been facing bankruptcy or circumstances that threaten the firm, the court will look more favorably upon the merger, the firm must show: not likely to survive w/o merger

***You are on the subway in New York when you overhear two people you do not know talking about an upcoming merger, news not yet public. They seem to know their stuff. If you buy stock based on this information, and profit when the information turns out true, you have:

profited, but are an outsider and so your actions are probably not illegal

Fair Credit Billing act

protects consumers for inaccurate charges