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Which of the Following Represents the General Rule Under Rule

Question 40

Multiple Choice
Which of the following represents the general rule under rule 10b-5 in regard to the duty of a company to reveal corporate developments?

Which of the following represents the general rule under rule 10b-5 in regard to the duty of a company to reveal corporate developments?


A) A company has no general duty under Rule 10b-5 to reveal corporate developments unless the company or its insiders (1) trade in securities or (2) recommend trading to someone else.
B) A company has no general duty under Rule 10b-5 to reveal corporate developments unless the company or its insiders (1) trade in securities, (2) recommend trading to someone else, or (3) disclose the information as a tip while withholding it from the general public.
C) A company has a general duty under Rule 10b-5 to reveal corporate developments that are material.
D) A company had a general duty under Rule 10b-5 to reveal corporate developments if it appears (1) that developments are material and (2) that the material developments will have a negative effect on the company's financial reports.

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