Riley,an engineer for Shur-2-Gro Seed Corporation,learns that Shur-2-Gro has developed a corn hybrid to triple the output of any farm.Riley buys 20,000 shares of Shur-2-Gro stock.He tells Tess,who buys 15,000 shares.After the new hybrid is announced publicly,the price of Shur-2-Gro stock in-creases.Riley and Tess sell their shares for a profit.Under the Securities Exchange Act of 1934,liability may be imposed on

Question

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Riley and Tess may be liable for insider trading under the Securities Exchange Act of 1934 because they traded Shur-2-Gro stock based on non-public, material information about the new corn hybrid.

Riley,an Engineer for Shur-2-Gro Seed Corporation,learns That Shur-2-Gro Has Developed