Dave,an accountant,does not work for Emergent Company,but wrong?fully obtains inside information concerning Emergent.Based on the in?forma?tion,Dave buys and sells Emergent stock for personal gain.The Securities and Exchange Commission prose?cutes Dave,arguing that he is liable because he stole in?formation right?fully belonging to another.This argument is

Question

Quizplus · Accepted Answer

The argument made by the Securities and Exchange Commission is based on the misappropriation theory, which holds that a person is liable for trading on the basis of inside information misappropriated from a company or party with a fiduciary duty. In this case, Dave wrongfully obtained inside information about Emergent and traded on it for personal gain, making him liable under the misappropriation theory.

Dave,an Accountant,does Not Work for Emergent Company,but Wrong?fully Obtains Inside