Which of the Following Is False Regarding the Misappropriation Theory

question 6

Multiple Choice

Which of the following is false regarding the misappropriation theory of insider trading?

• A) If a trader discloses to a source of nonpublic information that he or she plans to trade on the basis of that information, there is no violation under the misappropriation theory.
• B) Liability under the misappropriation theory requires deception.
• C) The misappropriation theory widens the class of persons who can be found liable for insider trading.
• D) The trader cannot be held liable unless he or she is an insider of the company whose securities are traded.

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