Director of a company. (slides) We are old Patricia is a Director of SEEP so she will be an Officer within the Corporations Law. 2. Section 180 requires that an Officer must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would. (slides) Patricia and Dan did not act in a way that a reasonable person would because they failed to make good decisions that deal with the financial and business affairs of SEEP, therefore it is likely they have breached section 180.
Daniels v AWAY Ltd (1995) 37 ANSWER 438: The CEO breached his duty of care and diligence because he did not exercise due care and skill to cover sections dealing with the financial status and business affairs of the company. (fact) 3. Section 183 states a person who obtains information because they are, or have been, a Director of a corporation must not improperly use the information to gain an advantage for themselves or someone else; or cause detriment to the corporation. Slides) Patricia caused SEEP to pay $1 more for its takeover bid than originally anticipated because the share price of FLIP doubled. Hence, it is probable Patricia has breached section 183. ASIA v Vizier [2005] FCC 1037: The CEO of Tellers provided the Directors with confidential information about ASS listed companies, so the best investment decisions could be made for Tellers. Vizier, a Director of Tellers, used this information to buy shares in those companies before Tellers did and thus made money. Vizier was held to have breached section 183. (fact) 4.
Section 184 requires that Officers will be liable to a criminal offence if they contravene a civil penalty provision, recklessly or dishonestly, and fail to discharge their duties in good faith in the best interest of the corporation, or for a proper purpose. As Patricia has contravened sections 180 and 183, then it is expected she has breached section 184. Adler v ASIA (2002) 42 SCARS 80: Santos J, ordered Adler be disqualified from managing a company for 20 years, imposed a pecuniary penalty on him of $450,000, and ordered him to pay compensation of $7,958, 112 to HI Insurance.
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On appeal to the NEWS Court of Appeal, these orders were upheld. (fact) 5. Section 1043 prohibits insider trading by any person to deal with shares or to use, or engage with others to deal in, price-sensitive information of a public company before the information is readily available to the public. Patricia provided information to her sister Fay bout Sepal’s intention to make a takeover bid to FLIP, and Patricia directed Fay to buy shares in FLIP while they were cheap so she could make some money. As a result, her sister Fay purchased a large amount of shares in FLIP and she made $250,000 profit.
Consequently, it is likely Patricia will be found to have violated section 1043. R v Irvin [2004] NEWSCAST 7: Mason P Wood C at CLC and Sully J, ordered the high profile Sydney stockbroker Rene Irvin, be prosecuted for the insider trading of Santa shares, hence sentenced him to imprisonment for a term of 9 months to be served by way of periodic detention, and fined him n the sum of $30,000. (fact) 6. Section 9 defines an Officer to include a Director of a company. (slides) We are told Dan is a Director of FLIP so he will be an Officer within the Corporations Law. 7.
