Fact Pattern 42-2A (Questions A13-A14 apply)
Dhani,an accountant for Eureka,Inc.,learns of undisclosed com?pany plan?s to market a new laptop.Dhani buys 1,000 shares of Eureka stock.He re?veals the company plans to Fay,who buys 500 shares.Fay tells Geoff,who tells Hu,each of whom buy 100 shares.They knows that Fay got her informa?tion from Dhani.When Eureka publicly an?nounces its new laptop,Dhani,Fay,Geoff,and Hu sell their stock for a profit.
-Refer to Fact Pattern 42-2A.Under the Securities Ex?change Act of 1934,Fay is most likely

Question

Quizplus · Accepted Answer

Fay is most likely liable for insider trading because she knew that Dhani was an insider and used that information to buy stock. It does not matter if she shared the information with others or if she solicited it from Dhani. The fact that she traded on non-public information obtained from an insider is enough to establish liability under the Securities Exchange Act of 1934.

Fact Pattern 42-2A (Questions A13-A14 Apply)