Fraudulent Employee Purchase Scheme

Fraudulent Employee Purchase Scheme

Question

A special scheme in which employees know their employer is seeking to purchase a certain asset and take advantage of the situation by purchasing the asset themselves is:

Answers

Explanations

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A. B. C. D.

B

The correct answer to the question is B. Turnaround sale or flip.

A turnaround sale, also known as a flip, is a special scheme in which employees have knowledge of their employer's intention to purchase a particular asset and use this knowledge to their advantage by purchasing the asset themselves. This can lead to the employees reselling the asset to the employer at a higher price, earning a profit.

This scheme involves a conflict of interest between the employees and the employer. The employees are in a position to use their inside knowledge to benefit themselves, rather than acting in the best interests of the employer.

Unauthorized sale (option C) refers to a situation where an employee sells an employer's assets without proper authorization. Written sale of unique assets (option D) refers to a written agreement for the sale of unique assets, such as art or antiques. Conflict of interest in sale (option A) refers to a situation where an individual has competing interests, such as personal and professional interests, that could influence their decision-making. While a conflict of interest could potentially be present in a turnaround sale scheme, it does not accurately describe the scheme itself.

In conclusion, the correct answer is B. Turnaround sale or flip, which is a scheme where employees take advantage of their employer's intention to purchase an asset and purchase the asset themselves, with the intention of reselling it to the employer at a higher price.