Tom Is an Engineer for Talbot Tech and Has Just

question 86

Multiple Choice

Tom is an engineer for Talbot Tech and has just discovered a revolutionary method for strengthening metals. He knows this knowledge will add value to Talbot Tech's stock. Tom happens to mention this discovery and its value to his neighbor, Fred. Fred can be charged with insider trading if he:

• A)continues to hold the Talbot Tech shares of stock he already owns.
• B)shares this information with another neighbor.
• C)sells his shares in Talbot Tech immediately after the news of the discovery is announced.
• D)provides this information to a friend who will trade the stock and split the profits with him.
• E)buys shares in Talbot Tech immediately after the news is announced and then shortly thereafter sells the shares at a profit.

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Definitions:

Misrepresentation

An untruthful assertion by one of the parties about a material fact.

Material Fact

A fact that is significant or essential to the issue or matter at hand, often affecting the outcome of a legal case.

Fraudulent Misrepresentation

The tort that occurs when a misrepresentation is made with the intent to facilitate personal gain and with the knowledge that it is false.

Justifiable Reliance

The principle that a party has acted upon another's representation with a reasonable belief that it was true, often relevant in cases of fraud or misrepresentation.