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R v Firns: A Case Study on Director Duties and Insider Trading

   

Added on  2022-11-26

14 Pages1123 Words498 Views
Commercial and
Corporations
LawR V FIRNS [2001] NSWCCA 191
R v Firns: A Case Study on Director Duties and Insider Trading_1
Introduction
Directors are expected to make sure that they
comply with duties given under theCorporations Act 2001 (Cth) (CA).
Since directors have access to crucial
information about the company, they should
avoid using such information to engage in
insider trading.

R v Firns is a relevant case in which the issue of
insider trading was raised.
This case will be evaluated to understand the
role of director duties.
R v Firns: A Case Study on Director Duties and Insider Trading_2
Case Background
Carpenter Pacific Resources NL (Carpenter) was
an Australia-based mining company that owned
exploration licenses in Papua New Guinea
(PNG).
The company was listed on the Australian
Securities Exchange (ASX) and it was managed
by two directors.
One of the subsidiary of the company, Matu
Mining Pty Ltd (Matu) applied to receive
exploration license in PNG (Austlii, 2001).
R v Firns: A Case Study on Director Duties and Insider Trading_3
Case Background
The new regulations implemented by the government
restricted Matu’s exploration license.
The company filed a lawsuit and the judgement of Supreme
Court was given in favour of the company.
Ron Firns was a director of Carpenters and he was present
at the court when the Supreme Court provided its decision
in favour of Matu (Wolters Kluwer, 2001).
R v Firns: A Case Study on Director Duties and Insider Trading_4

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