Fact Pattern 28-3
Dan,an accountant for Eureka! Inc.learns of undisclosed company plans to market a new laptop.Dan buys 1,000 shares of the firm's stock.He reveals the company plans to Fay,who tells Greg.Both Fay and Greg buy 100 shares.Greg knows that Fay got her information from Dan.When Eureka! publicly announces its new laptop,Dan,Fay,and Greg sell their stock for a profit.
-Refer to Fact Pattern 28-3.Under the Securities Exchange Act of 1934,Fay is most likely

Question

Fact Pattern 28-3
Dan,an accountant for Eureka! Inc.learns of undisclosed company plans to market a new laptop.Dan buys 1,000 shares of the firm's stock.He reveals the company plans to Fay,who tells Greg.Both Fay and Greg buy 100 shares.Greg knows that Fay got her information from Dan.When Eureka! publicly announces its new laptop,Dan,Fay,and Greg sell their stock for a profit.
-Refer to Fact Pattern 28-3.Under the Securities Exchange Act of 1934,Fay is most likely​

Quizplus · Accepted Answer

Fay is most likely liable for insider trading because she purchased stock based on material nonpublic information obtained from Dan, who was an insider of Eureka! Inc. There is no requirement that Fay had to have prevented others from profiting or misappropriate the information in order to be liable for insider trading. Moreover, Fay's employment status is not relevant to determining whether she engaged in insider trading.

Fact Pattern 28-3 Dan,an Accountant for Eureka! Inc.learns of Undisclosed Company Plans to Company