Federal Securities Laws - Medivac - Essay Example

In as much as the preliminary discussions regarding a merger in contravention of the law is still a question legal battle as consideration is given to the investors who may want to have such information to help make an informed decision regarding the investment.

In this regard, the courts will find it an offense to have crossed the materiality threshold if the information was given to an investor who did not seek such information but based on making a fortune. The law prohibits such moves that are only aimed at making individuals invest based on envisaged fortune. The case of piper v. Chis-Craft Industries, Inc. comes in handy in understanding how the article is enforceable in law (Hazen, 2003).  The supreme court in their ruling determined that there should be no private remedy in the case of competing tender offeror. The court declined to do direct compensation of any private remedy, and instead highlighted that the opinion was in pursuit of section 14 (e) - Private right of action in the hands of the target company or its shareholders (Hazen, 2003).

The Court in arguing the case of piper indicated that the motive of the Williams act was to ensure further protection by furnishing the shareholder of the target information so that they could make informed choices and not that of competing for tender offerors, which were considered collateral benefits to the tender offer provisions (Hazen, 2003). This shows how the article's consideration for enforcement is determined. The underlying factor, in this case, is the intention of giving insider information t the prospective shareholders. If the intention is the response to the inquiry, then one may be considered not culpable for any violation of the statute, but if it is proved to be for the conspiracy to make a fortune for oneself then it is a violation of the act.

The federal security act was enacted following the stock market crash of 1929, which ensued the great depression in the American economy. The period lasted about a decade and resulted in a negative impact on the industrialized nation of the western countries. It only ended following the American mobilization in World War II, i.e. 1941(Coffee, 2005). The federal security act was then enacted to cushion unscrupulous dealing based on the insider information that makes certain individuals make a rush for wealth. Security trades should not be based on insider information more particularly, a solicited one.

Concerning this, Manny’s conduct in light of the chapter constitutes an offense that is in contravention of the federal security acts as stipulated in the writings.