Corporation a was involved in merger discussions with corporation b. during this time, corporation a made public statements denying that any merger negotiations were taking place or that it knew of any corporate developments that would account for heavy trading activity in its stock. a class of former shareholders who sold corporation a stock after the public denial of merger activity and the announcement of the merger some six weeks later sued corporation a, contending that it made material misrepresentations of fact in denying the merger activity. corporation a stock increased 25 percent upon the merger announcement. corporation a stated that at the time of its denial of merger activity it was just involved in preliminary negotiations and its actions were not material until negotiations reached an agreement in principle. moreover, it asserted that the shareholders made no showing that they relied on the denial statement. decide.

In this case Corporation A is not at all responsible when the shareholder sold his stocks because as the deal regarding the merger was not finalized so corporation A did not accept a collaboration claims and that is fair and legal because an organization has the right to withheld any internal information before it is being made public for announcement and this case is such an instance where the organization did not disclose or accept the claims made by the media. The shareholder who sold the stocks of corporation A did it out of his own interest and has no right to blame corporation A for his loss, the shares are his property and it is his right to protect and use the shares accordingly for his benefit and no one can be blamed for any of the loss he incurs.

Explanation:

The rule 10B-5 is a regulation formally known as the Employment of Manipulative and Deceptive Practices that was created under the Securities Exchange Act of 1934. This rule deems it to be illegal for anybody to directly or indirectly use any measure to defraud, make false statements, omit relevant information or otherwise conduct operations of business that would deceive another person; in relation to conducting transactions involving stock and other securities.

Perhaps to the dismay of litigious shareholder representatives and their counsel, companies and other potential defendants will not be found liable for federal securities fraud under Section 10(b) and Rule 10b-5 simply because they do not disclose every piece of material information a shareholder might like to know. Nor are they required to be “clairvoyant” so that they can guarantee that the information they convey, or the reasons they choose to not convey certain information, will continue to be accurate. Rather, with respect to a claim of nondisclosure under Section 10(b), the premise underlying liability is that a company had a duty to disclose the information that was allegedly fraudulently withheld, and that duty either existed at the time of the omission or subsequently arose as a result of later events.

In this situation the company does not have any fradulent intention to withhold the information. The company is not unsure of the result and it is not involved in concrete discussions. Hence Company A is not responsible

1. Discount rate.

2. Increase.

Explanation:

A Federal Reserve Bank is one of the twelve regional banks of the Federal Reserve System in the United States of America. The Federal Reserve Banks are saddled with the responsibility of implementing the monetary policy designed and provided by the Federal Open Market Committee (FOMC).

Federal Reserve System also known as the Fed, was created under the Federal Reserve Act which was passed by US Congress in 1913. The Fed began its operations in the year 1914. It's a financial institution which was founded by President Woodrow Wilson and was primarily aimed at backing each banks in order to put a definitive end to the bank panics of the 1800s.

Furthermore, just like all central banks, the Fed is a government financial institution which is saddled with these responsibilities;

1. Controlling the issuance of currency in United States of America: the Fed promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.

2. Providing banking services to all the commercial banks in the country: the Fed is the "lender of last resort.

3. Regulating banking activities: it has the power to supervise and regulate banks.

The Federal Reserve Board is the governing body which essentially manages the Federal Reserve System and performs an oversight function on domestic monetary policies.

Additionally, the interest rate that the Federal Reserve Bank (the Fed) charges member banks for loans is known as the discount rate. Also, the Fed can increase the money supply by lowering this rate (discount rate) and thus, empowering the member banks to lend more money.