Fact Pattern 28-2
Ben,an accountant for AirLift,Inc. ,a ride service,learns of undisclosed company plans to distribute a new app.Ben buys 10,000 shares of AirLift stock.He reveals the company plans to Carly,who buys 5,000 shares.Carly tells Don,who tells Erwin,and each buys 1,000 shares.They know that Carly got her information from Ben.When AirLift publicly announces its new app,Ben,Carly,Don,and Erwin sell their stock for a profit.
-Refer to Fact Pattern 28-2.If Ben is liable under the Securities Exchange Act of 1934,it will be because the information on which he based his purchase of AirLift stock was

Question

Fact Pattern 28-2
Ben,an accountant for AirLift,Inc. ,a ride service,learns of undisclosed company plans to distribute a new app.Ben buys 10,000 shares of AirLift stock.He reveals the company plans to Carly,who buys 5,000 shares.Carly tells Don,who tells Erwin,and each buys 1,000 shares.They know that Carly got her information from Ben.When AirLift publicly announces its new app,Ben,Carly,Don,and Erwin sell their stock for a profit.
-Refer to Fact Pattern 28-2.If Ben is liable under the Securities Exchange Act of 1934,it will be because the information on which he based his purchase of AirLift stock was​

Quizplus · Accepted Answer

Ben is liable under the Securities Exchange Act of 1934 because the information he traded on was not yet public, making it insider information. He learned of undisclosed company plans to distribute a new app, which constitutes material nonpublic information. Therefore, option C is the correct answer.

Fact Pattern 28-2 Ben,an Accountant for AirLift,Inc. ,A Ride Service,learns of Undisclosed Company