Question

Fact Pattern 42-2A. Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals 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 information from Dhani. When Eureka publicly announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.

Under the Securities Exchange Act of 1934, Fay is most likely
liable for INSIDER TRADING.
criminal
not liable

Answer 1

The answer is that Fay is most likely liable for INSIDER TRADING.

Step-by-step explanation:

Insider trading which is the unfair advantage someone has over others in the purchase of a given securities in the stock market.

This illigal practice affords the individual the opportunity to purchase stocks at a cheaper rate while selling it off at a higher rate after it must have gone public.

In the case of Fay, he is likely liable for insider trading as a result of the prior information he got from Dhani.