2 The Times article notes that three days after the ACP awar

2. The Times article notes that three days after the ACP awarded a $158 million contract to the Spanish firm that manufactures the tugboats, the son of the canal administrator joined the law firm representing the tugboat manufacturer. Discuss whether such a relationship presents any potential conflicts of interest. (Shefrin 31) Shefrin, Hersh. Behavioral Corporate Finance, 2nd Edition. McGraw-Hill Higher Education, 20170314. VitalBook file.

Solution

In the given case as the son of the canal administrator joined the law firm and at the same time 3 days after the ACP the times article notes awarded a 158$ million contract this can arise a conflict of interest as now it may be happen that for obtaining the contract a law firm may gives some internal benefits or monetary benefits to the son of the canal administrator but now the main view of this conflict is judge by the level of the job or the working of the son of legal administrator

Here son of canal administrator is just a employee in the spanish firm. He is not the owner of the firm not having even any minor non controlling interest so there is a less chance of conflict of interest All this can be judge with the help of many other view points which are not available in the question properly. Mainly the conflict of interest is arise in case of ownership or in case of key managerial person. So according to me this relationship does not present any potential conflict of interest