Fact Pattern
Dhani,an accountant for Eureka,Inc. ,learns of undisclosed company plans to market a new laptop.Dhani buys 1,000 shares of Eureka stock.He reveals the company plans to Fay,who buys 500 shares.Fay tells Geoff,who tells Hu,each of whom buy 100 shares.They knows that Fay got her information from Dhani.When Eureka publicly announces its new laptop,Dhani,Fay,Geoff,and Hu sell their stock for a profit.
-Refer to Fact Pattern 29-2A.If Dhani is liable under the Securities Exchange Act of 1934,it will be because the information on which he based his purchase of Eureka stock was

Question

Fact Pattern 
Dhani,an accountant for Eureka,Inc. ,learns of undisclosed company plans to market a new laptop.Dhani buys 1,000 shares of Eureka stock.He reveals the company plans to Fay,who buys 500 shares.Fay tells Geoff,who tells Hu,each of whom buy 100 shares.They knows that Fay got her information from Dhani.When Eureka publicly announces its new laptop,Dhani,Fay,Geoff,and Hu sell their stock for a profit.
-Refer to Fact Pattern 29-2A.If Dhani is liable under the Securities Exchange Act of 1934,it will be because the information on which he based his purchase of Eureka stock was

Quizplus · Accepted Answer

Dhani purchased the Eureka stock based on undisclosed company plans that were not yet public. This is considered insider trading and violates the Securities Exchange Act of 1934.

Fact Pattern Dhani,an Accountant for Eureka,Inc. ,Learns of Undisclosed Company Plans to Company