1. The legal rules and the SEC self-regulatory oversight philosophy, and neither provide enough protection to stakeholders to prevent corporate misconduct. The fiduciary duty of loyalty means that directors and officers of a corporation must act without personal economic conflict when making decisions on behave of the corporation. Therefore, it is generally acceptable if a director makes a decision for the corporation that profits them both, but not the officer more than the well being of the corporation. The purpose of this rule is to reduce or eliminate any possible conflict of interest within the company’s shareholders and other top-level management when making decisions. The duty of care is a legal obligation that requires managers to show
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Part I: The Appellate Court rule should protect Spike’s position in accordance to the first amendment, which promises that the public is not deprived of their right to information (Central Hudson Gas & Electric Corp. v. Public Service Commission, 1980). Although, the first amendment does not clearly protect commercial speech, this leaves legal room for companies and/or individuals to determine how far the protection may apply. Thankfully, the first amendment does provide four guidelines to what is considered commercial speech. A speech may only be commercial if, its contents only propose a commercial transaction; the contents can easily be termed as advertisements; the contents of the speech reference to a specific product; or the maker has economic motivation to distribute the speech (Bork, 1971). Therefore, Spike first needs to determine whether the statement made satisfy the amendments commercial speech guidelines before any legal action can be enforced. In determining Central Hudson Gas & Electric Corp. v. Public Service Commission, the Supreme Court stated that any government restriction on advertising or other commercial speech is acceptable only if, the advertising is misleading; the government has a substantial interest in regulation; the regulation directly advances that interest; or the regulation is not more extensive than necessary. Part II: If Spike loses the case, the resulting case will set precedent chill “future give-and-take over corporate conduct,” as predicted by the Washington Post because everything will be redefined relating to commercial
Part I: The Appellate Court rule should protect Spike’s position in accordance to the first amendment, which promises that the public is not deprived of their right to information (Central Hudson Gas & Electric Corp. v. Public Service Commission, 1980). Although, the first amendment does not clearly protect commercial speech, this leaves legal room for companies and/or individuals to determine how far the protection may apply. Thankfully, the first amendment does provide four guidelines to what is considered commercial speech. A speech may only be commercial if, its contents only propose a commercial transaction; the contents can easily be termed as advertisements; the contents of the speech reference to a specific product; or the maker has economic motivation to distribute the speech (Bork, 1971). Therefore, Spike first needs to determine whether the statement made satisfy the amendments commercial speech guidelines before any legal action can be enforced. In determining Central Hudson Gas & Electric Corp. v. Public Service Commission, the Supreme Court stated that any government restriction on advertising or other commercial speech is acceptable only if, the advertising is misleading; the government has a substantial interest in regulation; the regulation directly advances that interest; or the regulation is not more extensive than necessary. Part II: If Spike loses the case, the resulting case will set precedent chill “future give-and-take over corporate conduct,” as predicted by the Washington Post because everything will be redefined relating to commercial