Donald Is the President and CEO of Formerly Fat Inc

Donald is the president and CEO of Formerly Fat Inc., a health and diet company that promotes weight loss through its "revolutionary" feast and famine diet. The diet calls for eating anything you want on Tuesdays and Thursdays, with fasting on Mondays, Wednesdays, and Fridays. On weekends, food is limited to one big lunch each day. Formerly Fat has a celebrity spokesperson who claims she and all her Hollywood friends swear by this diet, and the company has infomercials running on television constantly. On a Friday afternoon, Donald is called by a reporter, who asks if he's concerned that the New England Journal of Medicine, one of the most respected and prestigious medical journals in the country, is about to publish an article on Tuesday documenting that numerous practitioners of this diet suffer from serious medical problems and that three deaths have occurred relating to the diet. The article's authors will be calling for an investigation and eventual ban on advertising and promotion of the diet. Donald laughs and claims the article will be challenged and shown to be inaccurate. As soon as he hangs up, he calls his wife, who has the company stock in her name for liability reasons, and then his brother and says to each, "I just got word that the company is in trouble, and we will have problems soon. Sell your stock immediately." On Monday morning, his wife and brother sell all of their holdings. On Tuesday the article is published, and by Wednesday the stock value is down 40 percent. Discuss this situation.