John,who Has a Reputation for Dishonesty,recently Incorporated an Investment Company

question 25

Multiple Choice

John,who has a reputation for dishonesty,recently incorporated an investment company to protect himself from liability for his dishonest activities.John makes himself an employee of the company and fraudulently misrepresents an investment to a new customer who invests a large sum of money,which John pockets.A few days later the company goes bankrupt.In this situation,the investor

• A)can sue John for breach of fiduciary duty.
• B)can move to have the court pierce the corporate veil and sue John directly for fraud.
• C)can sue both the company and John.
• D)can sue only the company.
• E)none of the above

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Definitions:

Six Elements

Essential components required for something to be complete or legally binding; the term contextually varies, such as in contracts or scientific compositions.

Propensity

A natural inclination or tendency towards a particular behavior or action.

Keeper

An individual responsible for the care or management of something, such as a property, animal, or institution.

Playfulness

An attitude or approach characterized by fun, lightheartedness, and a willingness to engage in playful activities.