Fact Pattern 42-1B (Questions B12-B13 apply)
Dhani, an accountant for Eureka! Inc. learns of undisclosed com?pany plan?s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re?veals the company plans to Fay, who tells Geoff. Both Fay and Geoff buy 100 shares. Geoff knows that Fay got her informa?tion from Dhani. When Eureka! publicly an?nounces its new laptop, Dhani, Fay, and Geoff sell their stock for a profit.
-Refer to Fact Pattern 42-1B. Under the Securities Ex?change Act of 1934, Fay is most likely

Question

Quizplus · Accepted Answer

Fay is most likely liable for insider trading as she knew that the information was obtained from an insider (Dhani) and used it to make a profit. She did not disclose this information to the public and thus gained an unfair advantage over other investors. The fact that she shared the information with Geoff does not excuse her actions.

Fact Pattern 42-1B (Questions B12-B13 Apply)