Review problem 23-13, found on page 670 of your eBook. Lets

Review problem 23-13, found on page 670 of your eBook. Let’s look atcorporate malfeasance, both specifically as it is seen in the case ofMr. Bleakney and NMC, and more generally, at companies across thecountry. It seems as though there is an outbreak of corporate ‘badethics’ that is translating into escalating costs for compliance andpolicing. Along with the SEC and their policing and efforts at endingbad business practices that relate to the stock market, we also have theSarbanes-Oxley Act, also known as SARBOX, or SOX, which is becoming abig buzzword in the business world. We will look at that here and in theother topic. As part of that discussion, start thinking about the waysdifferent officers of the company will look at and use or follow SOX(i.e., the CEO, CIO, and CFO). To start this discussion, let’s look at the conduct of Mr.Bleakney: Was his conduct illegal under the Securities and Exchange Act,and more specifically, Section 10(b) and Rule 10b-5? If so, how? If his conduct was not illegal under Section 10(b) and Rule 10b-5, explain why not. Was his conduct unethical? Why or why not? If Mr. Bleakney is able to avoid prosecution under the 1934Securities and Exchange Act, will he be subject to prosecution underSarbanes-Oxley?

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