Written Assignment Unit 4
MBA Business Administration
University of the People
BUS 5115-Business Law, Ethics, and Social Responsibility
Case Study: The Good Credit Reference
The case study revolves around Kathy Ryan, credit officer at Diversified Consolidated
Corporation (DCC), and on the information she received regarding North Manufacturing which
she is responsible for extending credit worth $1million. Kathy Ryan got insider information from
Scott Bradley, North’s treasurer regarding North's financial status that wasn't made public.
Consequently, the ethical dilemma is if she should use this information and in what
circumstance?
Relevant Facts
North Manufacturing has a good credit record by making payments on time and uses DCC as a
credit reference to get credit from other suppliers. The financial statements are not fraudulent and
past transactions support this. However, there are rumors that North is not financially stable
which were confirmed by Scott Bradley, North's treasurer.
Kathy Ryan got this information based on the close business relationship between North
Manufacturing and DCC. This information is meant to be confidential and non-public.
Furthermore, this information is material, meaning if it's revealed it will affect the decision of the
suppliers including Basic Products. Consequently, Kathy has non-public material information
that she acquired from an insider.
Mike Walman, working in Credit Department at Basic products requests North's payment history
information from Kathy which she provided. However, he mentions the rumors and their
credibility which Kathy can attest to. Based on Scott's comment North plans to take credit from
Basic products and increase revenue payback DCC and survive the storm. Then pay for Basic
products at a later date.
MBA Business Administration
University of the People
BUS 5115-Business Law, Ethics, and Social Responsibility
Case Study: The Good Credit Reference
The case study revolves around Kathy Ryan, credit officer at Diversified Consolidated
Corporation (DCC), and on the information she received regarding North Manufacturing which
she is responsible for extending credit worth $1million. Kathy Ryan got insider information from
Scott Bradley, North’s treasurer regarding North's financial status that wasn't made public.
Consequently, the ethical dilemma is if she should use this information and in what
circumstance?
Relevant Facts
North Manufacturing has a good credit record by making payments on time and uses DCC as a
credit reference to get credit from other suppliers. The financial statements are not fraudulent and
past transactions support this. However, there are rumors that North is not financially stable
which were confirmed by Scott Bradley, North's treasurer.
Kathy Ryan got this information based on the close business relationship between North
Manufacturing and DCC. This information is meant to be confidential and non-public.
Furthermore, this information is material, meaning if it's revealed it will affect the decision of the
suppliers including Basic Products. Consequently, Kathy has non-public material information
that she acquired from an insider.
Mike Walman, working in Credit Department at Basic products requests North's payment history
information from Kathy which she provided. However, he mentions the rumors and their
credibility which Kathy can attest to. Based on Scott's comment North plans to take credit from
Basic products and increase revenue payback DCC and survive the storm. Then pay for Basic
products at a later date.
