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.Under the Securities Exchange Act of 1934,Carly is most likely

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.Under the Securities Exchange Act of 1934,Carly is most likely​

Quizplus · Accepted Answer

Carly is most likely liable for insider trading because she purchased stock based on material nonpublic information obtained from Ben, who is an insider of AirLift. It does not matter if she shared the information with others or if she solicited the information from Ben. The fact that she traded on nonpublic information obtained from an insider makes her liable for insider trading.

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