Nokia CaseEssay Preview: Nokia CaseReport this essayDiscussion and AnalysisAs far as I know, what the article said is a case about the Securities and Exchange Commission sued Citigroup Inc. over a mortgage-bond deal, calling the agreement “fair, adequate and reasonable.” According to what the article said, last month, U.S. District judge Jed S. Rakoff heard the case and questioned the two parties. So there is a question why should the U.S. District Court hear the case? I think the answer is the U.S. District Courts are the federal court systems trial courts of general jurisdiction, and the geographical area served by each court is referred to as a district.
Well, on the one hand, in its own filing, the SEC said potential investor loss could be in excess of $700 million. However, the net profits by Citigroup were at least $160 million. We have learned a theory of social responsibility that says a corporations duty is to make a profit while avoiding causing harm to others called Moral Minimum. Under this theory, as long as business avoids or corrects the social injury it causes, it has met its duty of social responsibility. However, in this case, the SEC indicated that Citigroup made big profit while causing the potential investors a loss of more than $700 million. Thus, we can consider the action as a violation of Moral Minimum in accordance with the filing.
The SEC’s statement included at least two statements that the company’s share price would be subject to a penalty. On Sept. 31, 2015, former Vice Chairman of Corporate America, Dan Raimondzio, confirmed that the company lost $60 million in stock in a stock market trading day in August 2015, according to Forbes. Raimondzio also explained that his company has experienced a loss due to improper compensation, an alleged violation of financial law. The SEC’s statement said the company made big profit, but didn’t say whether the loss was due to financial condition or simply because the company didn’t meet the fair market value or even the necessary legal standard.
On Sept. 22, the SEC announced that, according to an internal document prepared by an independent watchdog group, the company may have “lost some of its stock with the exception of a period of low volume.” The SEC’s report said that the company “expected a loss of $1.3 million in this period” and suggested that the company’s shares were likely to be worth $1.3 million or more later when a financial statement revealed “the company could take advantage of the high volume of potential investor activity.” A week after the SEC’s announcement of the $60 million loss, JPMorgan is said to have warned regulators about the potential losses and even announced that it had agreed to cover the settlement to the SEC. JPMorgan’s announcement, along with others, has generated headlines. The Bloomberg View Businessweek reported that after a confidential court document uncovered a large portion of the losses JPMorgan had suffered, it also claimed that some of its creditors had been paid millions of dollars.
As the Financial Times reported, the deal “took about three months to complete, with no notice given to investors that their risk would be reduced to ‘not far off’.” Raimondzio told Forbes the company’s performance had not reached levels as expected, and the company admitted that its “losses in this area have been very close at the beginning of the year.” The SEC said the company “likely will lose nearly $1 million in trading at an appropriate price in this same period.” Raimondzio, with his brother, Paul, co-founder of the business, also hinted that the company might be in a different period “which could put more strain on its financial condition … if this is not what is required at our present time as a company.” If all else fails, one way to consider this possible issue is to consider what sort of financial instruments would be required for a corporation filing a lawsuit and why.
On the other hand, the SEC alleged that Citigroups employees were accused of negligence in failing to ensure that disclosures to sophisticated investors provided complete information regarding its role in the transaction. To determine whether a defendant is liable for negligence, it must first be ascertained whether the defendant owed a duty of care to the plaintiff. Obviously, in this case, Citigroups employees are liable for harm that is the foreseeable consequence of their actions. Once we find that the Citigroup actually owed the plaintiff a duty of care, it must determine whether the defendant breached that duty. As we can see, Citigroups employees are false to act as reasonable persons would act. But at the same time, under the law, the negligent party is not necessarily for all damages set in motion by its negligent act. Based on the public policy, the law establishes a point along the damage chain after which the negligent party is no longer responsible for the consequences of its actions.
At last, I think what we learn from this case is the law protects a person from unauthorized touching, restrained, or other contact. In addition, the law protects a persons legal property. Violation of these rights, the defendant will be punished by the law.