When a company goes from being a family owned business to a
publicly traded company one of the biggest concern is insider
trading. Insider trading is defined as a direct employee or official
within the company having the access to knowledge inside the
company regarding the trading of securities (Kubasek,. et al). Because
Fred's Miracle Cough Syrup is a family owned business, it is probable
that the family will remain with a significant control in the stakes and
thus access to information that the rest of the shareholders may not
have access to. Given Fred's family history of family members going
rogue it may be a pretty significant liability. Unless all family matters
are settled or the family does not hold significant stakes in the
company it may be a deterrent for potential investors.
Kubasek, N. et.al., (2020). Dynamic Business Law, Fifth Edition. New
York, NY: McGraw-Hill Education
