Riley, an engineer for Super Seed Corporation, learns that Super Seed has developed a corn hybrid to triple the output of any farm. Riley buys 10,000 shares of Super Seed stock. He tells Tess, who buys 5,000 shares. After the new hybrid is announced publicly, the price of Super Seed stock in?creases. Riley and Tess sell their shares for a profit. Under the Securities Exchange Act of 1934, liability may be imposed on

Question

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Both Riley and Tess may be liable under the Securities Exchange Act of 1934 for insider trading. They purchased shares based on non-public information about the new hybrid, and then sold for a profit after the information was made public. This is considered insider trading and is illegal.

Riley, an Engineer for Super Seed Corporation, Learns That Super