Cam, an accountant for Discount Inc., learns that the company's soon-to-be-announced quarterly sales figures exceed analysts' expectations. Cam tells Ed, who tells Frye, who buys 100 shares of the company's stock. Frye knows that Ed got the information from Cam. When Discount publicly announces the figures, Frye sells the stock for a profit. Under the Securities Exchange Act of 1934, Ed is most likely

Question

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Ed is most likely liable for insider trading because he received material, nonpublic information from Cam (an insider) and passed it on to Frye, who traded on that information. This chain of communication and trading on insider information is typically considered a violation of securities laws under the concept of "tipping."

Cam, an Accountant for Discount Inc