Fact Pattern 21-3 (Questions 23-26 Apply)

Fact Pattern 21-3 (Questions 23-26 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 buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know that Fay got her informa?tion from Dhani. When Eureka publicly an?nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
-Refer to Fact Pattern 21-3. Under the Securities Ex?change Act of 1934, Hu is most likely

A) liable for insider trading.
B) not liable because Hu is only a tippee, not a tipper.
C) not liable because Hu is too far down the chain of disclosure.
D) not liable because Hu traded on the basis of a true fact.