The following situations may be covered by insider trading laws in the United States. Please examine each situation described and indicate whether in your opinion a violation of insider trading laws might have occurred. What kind of violation, if any?
a. James Smith works for Cohen and Cooper, a local law firm and while browsing in his firm's law library discovers a new report from a legal client of his colleague, lawyer Roscoe Adams, that predicts serious financial problems if the client proceeds with its recently drafted strategic plan. Smith subsequently discovers discreetly that the strategic plan is to be launched next week. He also learns that Roscoe is selling the client's stock short through his broker. Smith quietly advises Roscoe not to make the intended security transactions and then lets the matter drop.
b. Samuel Joule learns from conversations with Sarah Conklin, a bartender at a local restaurant and bar, that neighboring Locket Corporation has recently developed a secret air warning device that may help prevent air collisions and may be worth tens of millions of dollars once it is announced to the government and the aircraft industry. Joule does not work for Locket, though he has been dating Miss Conklin for some time. Sarah Conklin also does not work for Locket. Both of these individuals decide to purchase 1,000 shares of Locket's common stock before Locket holds its press conference to announce the new air collision device. Joule and Conklin will use a bank loan to finance the purchase of Locket's shares. A wedding is planned if the transaction succeeds financially.

Question

The following situations may be covered by insider trading laws in the United States. Please examine each situation described and indicate whether in your opinion a violation of insider trading laws might have occurred. What kind of violation, if any?
a. James Smith works for Cohen and Cooper, a local law firm and while browsing in his firm's law library discovers a new report from a legal client of his colleague, lawyer Roscoe Adams, that predicts serious financial problems if the client proceeds with its recently drafted strategic plan. Smith subsequently discovers discreetly that the strategic plan is to be launched next week. He also learns that Roscoe is selling the client's stock short through his broker. Smith quietly advises Roscoe not to make the intended security transactions and then lets the matter drop. 
b. Samuel Joule learns from conversations with Sarah Conklin, a bartender at a local restaurant and bar, that neighboring Locket Corporation has recently developed a secret air warning device that may help prevent air collisions and may be worth tens of millions of dollars once it is announced to the government and the aircraft industry. Joule does not work for Locket, though he has been dating Miss Conklin for some time. Sarah Conklin also does not work for Locket. Both of these individuals decide to purchase 1,000 shares of Locket's common stock before Locket holds its press conference to announce the new air collision device. Joule and Conklin will use a bank loan to finance the purchase of Locket's shares. A wedding is planned if the transaction succeeds financially.

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The Answer of The following situations may be covered by insider trading laws in the United States. Please examine each situation described and indicate whether in your opinion a violation of insider trading laws might have occurred. What kind of violation, if any?
a. James Smith works for Cohen and Cooper, a local law firm and while browsing in his firm's law library discovers a new report from a legal client of his colleague, lawyer Roscoe Adams, that predicts serious financial problems if the client proceeds with its recently drafted strategic plan. Smith subsequently discovers discreetly that the strategic plan is to be launched next week. He also learns that Roscoe is selling the client's stock short through his broker. Smith quietly advises Roscoe not to make the intended security transactions and then lets the matter drop. 
b. Samuel Joule learns from conversations with Sarah Conklin, a bartender at a local restaurant and bar, that neighboring Locket Corporation has recently developed a secret air warning device that may help prevent air collisions and may be worth tens of millions of dollars once it is announced to the government and the aircraft industry. Joule does not work for Locket, though he has been dating Miss Conklin for some time. Sarah Conklin also does not work for Locket. Both of these individuals decide to purchase 1,000 shares of Locket's common stock before Locket holds its press conference to announce the new air collision device. Joule and Conklin will use a bank loan to finance the purchase of Locket's shares. A wedding is planned if the transaction succeeds financially.

The Following Situations May Be Covered by Insider Trading Laws