Nokia Case

Discussion and Analysis

As far as I know, what the article said is a case about the Securities and Exchange Commission sued Citigroup Inc. over a mortgage-bond deal, calling the agreement "fair, adequate and reasonable." According to what the article said, last month, U.S. District judge Jed S. Rakoff heard the case and questioned the two parties. So there is a question why should the U.S. District Court hear the case? I think the answer is the U.S. District Courts are the federal court system's trial courts of general jurisdiction, and the geographical area served by each court is referred to as a district.

Well, on the one hand, in its own filing, the SEC said potential investor loss could be in excess of $700 million. However, the net profits by Citigroup were at least $160 million. We have learned a theory of social responsibility that says a corporation's duty is to make a profit while avoiding causing harm to others called Moral Minimum. Under this theory, as long as business avoids or corrects the social injury it causes, it has met its duty of social responsibility. However, in this case, the SEC indicated that Citigroup made big profit while causing the potential investors a loss of more than $700 million. Thus, we can consider the action as a violation of Moral Minimum in accordance with the filing.

On the other hand, the SEC alleged that Citigroup's employees were accused of negligence in failing to ensure that disclosures to sophisticated investors provided complete information regarding its role in the transaction. To determine whether a defendant is liable for negligence, it must first be ascertained whether the defendant owed a duty of care to the plaintiff. Obviously, in this case, Citigroup's employees are liable for harm that is the foreseeable consequence of their actions. Once we find that the Citigroup actually owed the plaintiff a duty of care, it must determine whether the defendant breached that duty. As we can see, Citigroup's employees are false to act as reasonable persons would act. But at the same time, under the law, the negligent party is not necessarily for all damages set in motion by its negligent act. Based on the public policy, the law establishes a point along the damage chain after which the negligent party is no longer responsible for the consequences of its actions.

At last, I think what we learn from this case is the law protects a person from unauthorized touching, restrained, or other contact. In addition, the law protects a person's legal property. Violation of these rights, the defendant will be punished by the law.