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task 41-2 In the Reeves v. E & Y case the motor hotel defined the word nones as it is use in analogy to securities. The court adopted the family resemblance test. This test compares the note in question with a family of typical transactions that fall right(prenominal) the securities acts. This family includes consumer support notes, home mortgages and laconic term securities which are pass conceit to be an investment of one year or less. These notes diverge by Co-op may be a short circuit term security, since they were high engross and POD securities bother 41-7 Hoodes would give the sack income from these facts. His conduct was not violated by any fairness and his trade did not involve insider trading or new(prenominal) restrict. Unless there is evidence of insider trading here or other than violation of internal rules, or acting in affair contrary to order while holding fiduciary position. Problem 51 -5 The Lindner Funds case extended and explain ed an earlier case, Aluma kraft paper paper v. Elmer Fox and held that the law extends liability to third parties for whose derive and focussing the controller supplies the information, or to such third persons, although not identified, who the accountant knows the recipient of the audit intends to supply such information.

under the facts as given here, if Coopes knew or should have known that the audits would be used by investors then they could be held liable if the audits werent through properly. The Ultramares school of thought would require privity between the investment company and the accountants and, chthonic that doctrine, Coopes would not be liable. They would be sued under the foreclose ability sample for Lindners! decision to purchase the stock. If the malpractice occurred when Lindner was a shareholder, they would be liable under the restatement standard of being members of a limited class of intend users and they would be liable under the Ultramares doctrine because as shareholders they would be considered in privity with the accountants. Problem 51-7 This...If you want to nourish a sound essay, order it on our website: OrderEssay.net

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