A dental hygienist learns of an upcoming, unannounced corporate acquisition while chatting with a patient who is an executive at a publicly traded healthcare firm. The hygienist purchases shares of the target company prior to the public announcement. Which of the following statements accurately describes the liability under federal insider trading regulations?
- The hygienist can be held liable as a tippee for trading on material nonpublic information, even though the hygienist is not an employee of the firm.Cevap
- BThe hygienist cannot be held liable because insider trading regulations apply exclusively to officers, directors, and employees of the firm.
- CNeither party can be held liable because information disclosed during an informal conversational setting is exempt from SEC prohibitions.
- DOnly the company executive can be held liable because non-insiders who receive unsolicited information bear no legal responsibility under securities laws.
Cevap
The hygienist can be held liable as a tippee for trading on material nonpublic information, even though the hygienist is not an employee of the firm.
Under federal insider trading laws, tippee liability applies to any individual who receives material nonpublic information and executes trades based on that information, regardless of whether they are employed by or affiliated with the issuing corporation.
Adım Adım Çözüm
Anahtar Kavram
Tippee Liability under Insider Trading Regulations