Question

Gus is the supervisor of a large manufacturing company. Gus has heard that a competitor is working on a new product that will be tough competition for his company. Gus tells his direct reports to find out what they can about this company. Sam, one of Gus’ direct reports, has a good friend who works at this competitor. Sam gives his friend some Ethereum (a virtual currency) that Sam has worth $27,000 and which are hard to trace. Sam’s friend hands Sam a thumb drive and tells him to download it and then destroy it. Sam downloads the information on the thumb drive and all the information on the new product of the competitor is there. Sam tells Gus that he came upon some information, did not exactly tell Gus how he found it and provides Gus with information about the competing product that is extremely valuable to Gus’ company. Gus passes the information on to the president of his company.

Please discuss the criminal liability of Sam, Gus and the president of the company and the crimes involved.

Answer 1

Sam, Gus, and the president could each face criminal liability for their roles in acquiring and using trade secrets from a competitor through bribery, corporate espionage, and potentially insider trading, which could result in substantial fines and imprisonment.

Step-by-step explanation:

The scenario described involves potential legal and ethical violations, particularly in the realm of corporate espionage, bribery, and possibly insider trading. Sam could face criminal liability for bribing an employee of a competitor with Ethereum to obtain confidential information. This act could be covered under laws that prohibit corporate espionage, theft of trade secrets, and bribery. Gus, as Sam's supervisor, also could face liability if it were determined that he had knowledge of or was willfully ignorant of the illicit means by which the information was obtained. The president of Gus's company may also be liable, especially if they used the information knowing its source was illegal or if they failed to perform due diligence to verify the legality of the information's acquisition. Penalties for these crimes could include significant fines and even imprisonment, as evidenced by historical cases where executives faced fines and prison time for similar offences.