Cam, an Accountant for Discount Inc

question 33

Multiple Choice

Cam, an accountant for Discount Inc., learns that the company's soon-to-be-announced quarterly sales figures exceed analysts' expectations. Cam tells Ed, who tells Frye, who buys 100 shares of the company's stock. Frye knows that Ed got the information from Cam. When Discount publicly announces the figures, Frye sells the stock for a profit. Under the Securities Exchange Act of 1934, Ed is most likely

• A)liable for insider trading.
• B)not liable because Ed did not prevent others from profiting.
• C)not liable because Ed did not misappropriate any information.
• D)not liable because Ed does not work for Discount.

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Definitions:

Counteroffer

A reply to a proposal where the initial conditions are declined and alternative conditions are suggested.

Accepted Painting

An artwork that has been officially received or approved, often in the context of submissions to a gallery or competition.

Defective Goods

Products that are not as promised or are hazardous due to manufacturing or design flaws.

Recover Value

The act of obtaining the equivalent value of a loss or damage that has been inflicted, often through legal or financial means.