Asked by Nancy Lainez on Jul 11, 2024
Verified
Which of the following is a false statement regarding the liability of directors and officers for criminal behavior?
A) Directors and officers can be held personally responsible for their own crimes.
B) Directors and officers can be held personally responsible for the crimes of other employees within the organization when they have failed to adequately supervise the employee's behavior.
C) An officer can be held criminally liable for the illegal conduct of an employee if the court determines that a responsible person would have known about and could have prevented the illegal activity.
D) Directors and officers who use insider information to trade their corporation's stock for a profit can be held liable for breaching their fiduciary duty.
E) According to the responsible person doctrine,a court may not find a corporate officer criminally liable for the illegal conduct of an employee unless the officer profited personally from the illegal activity.
Directors And Officers
Individuals appointed or elected to oversee and manage a corporation or organization and make strategic decisions.
Criminal Behavior
Actions that violate laws and are punishable by the government, including felonies and misdemeanors.
Responsible Person Doctrine
A legal principle that holds an individual personally liable for unpaid taxes or obligations of a business, based on the level of control or authority they have over the financial operations of the entity.
- Understand the legal and financial implications of corporate officers' and directors' actions, including liability for criminal behavior.
Verified Answer
RP
Roberto ParedesJul 13, 2024
Final Answer :
E
Explanation :
Directors and officers can be held personally responsible for the torts and crimes of other employees within the organization if they fail to supervise the employees' behavior adequately.According to the responsible person doctrine,a court may find a corporate officer criminally liable regardless of the extent to which the officer took part in the criminal activity if the court determines that a responsible person would have known about and could have prevented the illegal activity.
Learning Objectives
- Understand the legal and financial implications of corporate officers' and directors' actions, including liability for criminal behavior.