Question

In U.S. v. McGee, McGee purchased a substantial amount of a PHLY stock after a confidential conversation with a PHLY insider who was a fellow member of Alcoholics Anonymous. The PHLY stock subsequently showed a substantial profit. When the SEC brought charges of insider trading against McGee, the court found:

A) McGee was convicted of insider trading for violating a fiduciary duty of confidentiality.B) McGee was not guilty of insider trading because a promise of confidentiality for purposes of alcoholism treatment is not the same as a fiduciary duty to establish misappropriation liability.C) McGee was not guilty of insider trading because he had no fiduciary relationship with PHLY.D) McGee was convicted of insider trading despite the absence of a fiduciary duty, because any duty of confidentiality, trust, loyalty, or confidence would suffice to establish misappropriation liability.

Answer 1

A) McGee was convicted of insider trading for violating a fiduciary duty of confidentiality.

Step-by-step explanation:

When the SEC charges McGee against insider trading , the court declared McGee guilty of insider trading for not complying with a fiduciary duty of confidentiality.

McGee is a registered registered representatives of Ameriprise Financial Services who was accused of buying and selling stock in Philadelphia Consolidated Holding Corp in respect of non-declared information about a Merger which is likely to occur between between Philadelphia Consolidated Holding Corp and Tokio Marine Holdings.

The SEC claimed McGee got the facts or details from a Philadelphia Consolidated Holding Corp executive who revealed it to him