Which of the following would be likely to result in liability to a director of a textile company?
A) The director sells stock in the textile company before a merger is announced.
B) The director agrees to hire as president a man he has not personally investigated.
C) The director owns stock in an automobile company.
D) All of these would result in the director's liability.

Question

Quizplus · Accepted Answer

A) Selling stock in the company before a merger is announced could result in liability due to insider trading laws, as the director would be using non-public, material information for personal gain.

Which of the Following Would Be Likely to Result in Liability