Fact Pattern 30-3
Dhani, an accountant for Eureka! Inc. learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka! stock. He reveals the company plans to Fay, who tells Geoff. Both Fay and Geoff buy 100 shares. Geoff knows that Fay got her information from Dhani. When Eureka! publicly announces its new laptop, Dhani, Fay, and Geoff sell their stock for a profit.
-Refer to Fact Pattern 30-3. Under the Securities Exchange Act of 1934, Fay is most likely

Question

Quizplus · Accepted Answer

Fay is most likely liable for insider trading because she received nonpublic information from Dhani and used it to make a profit. It does not matter that she did not prevent others from profiting or that she did not misappropriate any information herself. The Securities Exchange Act of 1934 applies to anyone who unlawfully uses inside information, regardless of whether they work for the company or not.

Fact Pattern 30-3 Dhani, an Accountant for Eureka! Inc. Learns of Undisclosed Company