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, Geoff 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, Geoff is most likely

Quizplus · Accepted Answer

Geoff is most likely liable for insider trading because he traded on material nonpublic information that he knew was obtained from an insider (Dhani). He does not need to have prevented others from profiting, solicited information from Dhani, or work for Eureka to be held liable for insider trading under the Securities Exchange Act of 1934.