Fact Pattern 7-2
Ben, an accountant for AirLift, Inc., a ride service, learns of undisclosed company plans to distribute a new app. Ben buys 10,000 shares of AirLift stock. He reveals the company plans to Carly, who buys 5,000 shares. Carly tells Don, who tells Erwin, and each buys 1,000 shares. They know that Carly got her information from Ben. When AirLift publicly announces its new app, Ben, Carly, Don, and Erwin sell their stock for a profit.
-Refer to Fact Pattern 7-2. Under the Securities Exchange Act of 1934, Carly is most likely

Question

Fact Pattern 7-2
Ben, an accountant for AirLift, Inc., a ride service, learns of undisclosed company plans to distribute a new app. Ben buys 10,000 shares of AirLift stock. He reveals the company plans to Carly, who buys 5,000 shares. Carly tells Don, who tells Erwin, and each buys 1,000 shares. They know that Carly got her information from Ben. When AirLift publicly announces its new app, Ben, Carly, Don, and Erwin sell their stock for a profit.
-Refer to Fact Pattern 7-2. Under the Securities Exchange Act of 1934, Carly is most likely​

Quizplus · Accepted Answer

Carly is most likely liable for insider trading because she bought stock based on material nonpublic information that she received from Ben, who was an insider at AirLift. It does not matter whether she prevented others from profiting or solicited information from Ben, as these are not relevant factors in determining liability for insider trading. The fact that she does not work for AirLift is also not relevant.

Fact Pattern 7-2 Ben, an Accountant for AirLift, Inc., a Ride Service, Learns