Abby is a stockbroker for a large financial services company. A client who works at Sixth Generation Software, Ltd., just called to purchase several thousand shares of his company's stock. He reveals to her that the company is about to announce the appointment of a new CEO. Abby asks her client if this information is public knowledge. The reason she asks is to make certain that her client, her company, and she remain in compliance with Regulation FD, the Fair Disclosure rule.

Question

Quizplus · Accepted Answer

Regulation FD requires companies to make disclosures of material nonpublic information to all investors at the same time, rather than selectively disclosing information to certain individuals or groups. By asking if the information is public knowledge, Abby is ensuring that she does not receive such selective disclosure and remains in compliance with the rule.

Abby Is a Stockbroker for a Large Financial Services Company