In SEC v.Ginsburg,Ginsburg was CEO of a company that merged with another company,and he told his relatives that the merger might occur.Knowing that the stock price might then rise,the relatives bought stock in the company and profited.Ginsburg was prosecuted by the SEC for insider trading.The appeals court held that:

Question

Quizplus · Accepted Answer

The appeals court held that there was enough evidence to reasonably permit the inference that Ginsburg conveyed nonpublic information to his family members, making him liable for securities fraud. The fact that his relatives bought stock in the company and profited indicates that they acted on the nonpublic information that Ginsburg provided them. As the CEO, he had a duty to keep the information confidential and not use it for personal gain, which his actions clearly violate.

In SEC VGinsburg,Ginsburg Was CEO of a Company That Merged with Another