An employee who passes along information about his company to a relative and the relative trades in that stock as a result has not violated any securities laws as long as he does not trade in the stock.

Question

Quizplus · Accepted Answer

This statement is incorrect. The employee has violated securities laws by providing insider information to the relative, regardless of whether the relative actually trades in the stock. This is deemed as insider trading, which is illegal.

An Employee Who Passes Along Information About His Company to a Relative