In order to trigger liability under 10b-5 for insider trading, the investor must have had a __________ relationship with the source of information as an insider or as a "tippee" if he received information from an insider.

Question

Quizplus · Accepted Answer

The correct answer is "special" because under Rule 10b-5, liability for insider trading is triggered when the investor has a special relationship with the source of the information, either as an insider themselves or as a "tippee" who receives inside information from an insider. This special relationship implies a duty to abstain from trading on the basis of material, non-public information.

In Order to Trigger Liability Under 10b-5 for Insider Trading