Alice v. Looking Glass Corporation When Looking Glass Corporation decided to off

Question

Alice v. Looking Glass Corporation

When Looking Glass Corporation decided to offer certain securities for sale to the public, it was required by federal law to provide sufficient information to Alice (as well as to all other interested unsophisticated investors), so she and the other investors would be able to evaluate the financial risk involved in the purchase of these securities. Specifically, the law imposed liability on companies that make a false statement or have an omission that is “material” in the information that they provide to interested investors. What sort of information would an unsophisticated investor such as Alice consider to be material? What standard would the company be held to by a court if Alice brought a lawsuit against it? What legal claim(s) might Alice consider bringing against Looking Glass Corporation in this lawsuit? What damages could a court award Alice if she won this lawsuit?  Explain your answer and reasoning in depth.

Explanation / Answer

What sort of information would an unsophisticated investor such as Alice consider to be material?

Alice or any other unsophisticated investor will not be concerned with any minor inaccuracies. But anything beyond that, if disclosed, could surely deter her and other investors from buying the securities. Information such as any kind of a fraud in the business, change in the dividends, any significant change in the firms financial position, or any new discovery which has negative remarks, any process ar product liability, customer delinquencies, any pending law suits, making the false statements or omissions with respect to the above information could subject a company forced to be liable under the securities law.

What standard would the company be held to by a court if Alice brought a lawsuit against it?

If Alice brings lawsuit against the company, then the company shall be penelized by the Fedral court. The company shall be held for selling the sub-standard securities to the investors.

What legal claims might Alice consider bringing against Looking glass corporation against the lawsuit?

Alice might consider bringing the company against the law suit for the discovery of the of fraud. There would be charges against the corporation for misleading Alice and other investors.

What damages could a court award Alice if she won this lawsuit?

Court shall order the corporation to pay Alice for the damages. The damages incurred by Alice shall be paid to her along. These damages can also be termed as punitive damages which shall be compensated to Alice.

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