Question

Which two of the following criteria, taken together, would cause a particular fact to be considered insider information under the Insider Information and Securities Fraud Enforcement Act of 1988?

A.It is personally embarrassing to the CEO of the corporation.
B.It is not known to the general public.
C.It could have a strong effect on the welfare of the corporation.
D.It has only been reported in the industry's technical journals.

Answer 1

A fact is considered insider information if it is not known to the public and can strongly affect the corporation's welfare.

Step-by-step explanation:

Under the Insider Information and Securities Fraud Enforcement Act of 1988, a particular fact would be considered insider information if it meets two specific criteria. The criteria are: B) It is not known to the general public, and C) It could have a strong effect on the welfare of the corporation. Criterion B ensures that the information is exclusive to insiders, and Criterion C confirms that the information is material, meaning it could influence an investor's decision to buy, sell, or hold securities if it were made public.