Ears Is an Investment Adviser Representative

Ears is an investment adviser representative. During lunch today, she overheard two men talking about a hostile takeover that their firm was preparing to undertake. Based on this information, Ms. Ears does not hesitate to advise the client she meets with immediately after lunch-Mrs. Clueless-- to invest a sum of money in the firm the men had named as the target firm. Ms. Ears remembers that the price of target firms, on average, increases significantly with an announcement of this sort, but she does not inform Mrs. Clueless of the reason underlying her recommendation. Has there been any violation of insider trading laws in this scenario, as described?

A) No. The scenario does not suggest that Ms. Ears herself made any investment in the target firm, and Mrs. Clueless was not made aware of the basis for Ms. Ears' recommendation.
B) Yes. In making a recommendation based on information that was not publicly available, Ms. Ears has violated insider trading laws and is subject to both civil and criminal penalties.
C) No. Ms. Ears is not considered to be an insider of the company preparing the hostile takeover.
D) Yes. Both Ms. Ears and the two men have violated insider trading laws. The two men are prohibited from discussing such private information in a public setting, and Ms. Ears is prohibited from making a recommendation based on that information.