About 10 years ago, there were several bank mergers. Shortly after Big Bucks Bank bid on The Bank of Plenty, a story hit the local newspapers about the investigation into the purchase of several thousand shares of stock of the Bank of Plenty by three of its top executives, just prior to the announcement that Big Bucks Bank planned to buy Bank of Plenty. Upon close examination by the SEC (Securities and Exchange Commission) it was determined that the stock purchases were an illegal maneuver on the part of these executives. This is an example of insider trading. The executives were "banking" on the stock price rising sharply when the purchase announcement was made public.

Question

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The story about the investigation into the purchase of Bank of Plenty shares by three top executives just prior to the announcement of the purchase by Big Bucks Bank is an example of insider trading. The executives were hoping to profit from the anticipated rise in stock prices. The SEC determined that this was an illegal maneuver.

About 10 Years Ago, There Were Several Bank Mergers