Federal statutes prohibit officers and directors from purchasing or selling shares of their corporation's stock without adequately disclosing all material facts in their possession that may affect the stock's actual or potential value.

Question

Quizplus · Accepted Answer

Federal statutes, such as the Securities Exchange Act of 1934, require officers and directors to disclose material non-public information to the public before buying or selling their corporation's stock. This is to prevent insider trading and ensure fair and equal access to information for all investors. Failure to do so may result in legal and financial penalties.

Federal Statutes Prohibit Officers and Directors from Purchasing or Selling