A tippee is liable for acting on information that he or she should have known was not public.

Question

Quizplus · Accepted Answer

This statement is true. Tippees, or individuals who receive confidential information from an insider, can be held liable for trading based on that information if they should have known it was not public. This is known as the "should have known" standard and was established in the Supreme Court's decision in Dirks v. SEC.

A Tippee Is Liable for Acting on Information That He