Essay about Fin Week Homework 2
Definition of Security The Farmer’s Cooperative of Arkansas and Oklahoma (Co-Op) was an agricultural cooperative that had approximately 23,000 members. To raise money to support its general business operations, Co-Op sold to investors promissory notes that were payable upon demand. Co-Op offered the notes to both members and non-members, advertised the notes as an “investment program,” and offered an interest rate higher than that available on savings accounts at financial institutions. More than 1,600 people purchased the notes, worth a total of $10 million. Subsequently, Co-Op filed for bankruptcy. A class of holders of the notes filed suit against Ernst & Young, a national firm of certified public accountants that had …show more content…
Hoodes would win. The activities he did not violate any law. He didn’t get involved in insider trading. Base on this Hoodes wins.
3 Chapter 51.5
Ultramares Doctrine Texscan Corporation (Texscan) was a corporation located in Phoenix, Arizona. The company was audited by Coopers & Lybrand (Coopers), a national CPA firm that prepared audited financial statements for the company. The Lindner Fund, Inc., and the Lindner Dividend Fund, Inc. (Lindner Funds), were mutual funds that invested in securities of companies. After receiving and reviewing the audited financial statements of Texscan, Lindner Funds purchased securities in the company. Thereafter, Texscan suffered financial difficulties, and Lindner Funds suffered substantial losses on its investment. Lindner Funds sued Coopers, alleging that Coopers was negligent in conducting the audit and preparing Texscan’s financial statements. Can Coopers be held liable to Lindner Funds for accounting malpractice under the Ultramares doctrine, Section 552 of the Restatement (Second) of Torts, or the foreseeability standard? Lindner Fund v. Abney, 770 S.W.2d 437, Web 1989 Mo.App. Lexis 490 (Court of Appeals of