Business

Business

Asic vs Adler


Introduction

Since ASIC is a corporate entity, it can engage in legal action with other corporate companies that it suspects to be committing criminal or civil offences within the financialsystem. There are several famous court cases that ASIC has been involved with in Australian law and ASIC vs Adler is one of the cases. The sections that defendants commonly breached include ss180, 181, 182, and 183, which involve failing to act in good faith, failing to provide a duty of care and diligence, and avoiding the use information gained in their positions for their own benefit.
The ASIC v Adler (2002) case involved the defendant directors obtaining highly confidential information due to their positions, and using this information to base decisions upon which to buy or sell shares. The main defendant, Adler, was found guilty of  breaching ss 180, 181, 182 and 183 of the Corporations Act. The court held that Alder benefited both himself and his family in the transactions.

http://www.scribd.com/doc/18531717/CO5121-Assignment


Facts

Adler was a non-executive director of HIH Insurance Ltd (HIH). William was a director and the CEO of HIH. Fodera was a director and the finance controller of Hih. HIHC was a wholly owned subsidisry of hih. Adler requested and williams and fodera arranged for HIHC ot advance $10 million to Pacific Eagle Equity Pty Ltd (PEE),   a company controlled by Adler. The $10 million payment was arranged so that no other director of HIH would be aware of the advance. During the next two weeks PEE used some of these funds to purchse HIH shares to the value of approximately $4 million. Through these share purchases Adler sought to support HIH’s share price for the benefit of his substantial personal shareholdings in the company. Williams was aware of the intended use of the $10 million to acquire HIH shares. Soon after a unit trust was established with PEE as trustee. Units were issued to HIHC at a price of $10 million,...

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