The Securities and Exchange Commission (SEC)applies the misappropriation theory of insider trading to force executives who file or certify incorrect financial statements to return bonuses and additional compensation received.

Question

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The Securities and Exchange Commission (SEC) has successfully argued that a person should be considered to be a temporary insider if that person conveys nonpublic information that was to have been kept confidential. This philosophy is known as the misappropriation theory of insider trading.

The Securities and Exchange Commission (SEC)applies the Misappropriation Theory of Insider