Fact Pattern 7-3
Dan, an accountant for Eureka! Inc. learns of undisclosed company plans to market a new laptop. Dan buys 1,000 shares of the firm's stock. He reveals the company plans to Fay, who tells Greg. Both Fay and Greg buy 100 shares. Greg knows that Fay got her information from Dan. When Eureka! publicly announces its new laptop, Dan, Fay, and Greg sell their stock for a profit.
-Refer to Fact Pattern 7-3. Under the Securities Exchange Act of 1934, Fay is most likely

Question

Fact Pattern 7-3
Dan, an accountant for Eureka! Inc. learns of undisclosed company plans to market a new laptop. Dan buys 1,000 shares of the firm's stock. He reveals the company plans to Fay, who tells Greg. Both Fay and Greg buy 100 shares. Greg knows that Fay got her information from Dan. When Eureka! publicly announces its new laptop, Dan, Fay, and Greg sell their stock for a profit.
-Refer to Fact Pattern 7-3. Under the Securities Exchange Act of 1934, Fay is most likely​

Quizplus · Accepted Answer

Fay is most likely liable for insider trading because she knew that the information about the new laptop came from Dan, who was an insider at Eureka! Inc., and she purchased stock based on that information. It does not matter whether she prevented others from profiting, misappropriated information or worked for Eureka! Inc. Insider trading is prohibited regardless of these factors.

Fact Pattern 7-3 Dan, an Accountant for Eureka! Inc. Learns of Undisclosed Company