Ross, a sales executive with Steel Mill Inc., learns of undisclosed company plans to produce a new type of steel. Ross tells Tim, who tells Uri, who buys 100 shares of Steel stock. Uri knows that Tim got the information from Ross. When the firm publicly announces its new product, Uri sells the stock for a profit. Under the Securities Exchange Act of 1934, Uri is most likely

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Uri is considered to be a tippee who traded on insider information obtained from Ross through Tim. Ross is the original tipper who breached his duty of trust and confidence by disclosing the non-public information to Tim. Both Ross and Uri can be held liable for insider trading under the Securities Exchange Act of 1934. Even though Uri is not directly connected to Ross, he still benefited from insider information and therefore violated securities laws.

Ross, a Sales Executive with Steel Mill Inc