Fact Pattern 41-1A
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 41-1A. Under the Securities Ex?change Act of 1934, Fay is most likely

Question

Fact Pattern 41-1A 
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 41-1A. Under the Securities Ex?change Act of 1934, Fay is most likely

Quizplus · Accepted Answer

Fay is most likely liable for insider trading because she bought Eureka stock based on non-public information obtained from Dhani, who was an insider at the company. The fact that she shared the information with others does not excuse her from liability. Also, solicitation is not relevant in determining liability for insider trading under the Securities Exchange Act of 1934, and Fay's employment status is also not relevant.