Fact Pattern 7-3 Dan, an Accountant for Eureka! Inc. Learns of Undisclosed Company

question 71

Multiple Choice

Fact Pattern 7-3
Dan, an accountant for Eureka! Inc. learns of undisclosed company plans to market a new laptop. Dan buys 1,000 shares of the firm's stock. He reveals the company plans to Fay, who tells Greg. Both Fay and Greg buy 100 shares. Greg knows that Fay got her information from Dan. When Eureka! publicly announces its new laptop, Dan, Fay, and Greg sell their stock for a profit.
-Refer to Fact Pattern 7-3. Under the Securities Exchange Act of 1934, Geoff is most likely​

• A) ​liable for insider trading.
• B) ​not liable because Geoff is only a tippee, not a tipper.
• C) ​not liable because Geoff is too far down the chain of disclosure.
• D) ​not liable because Geoff traded on the basis of a material fact.

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Definitions:

Gastric Motility

The movements of the stomach muscles that mix and propel contents through the digestive system.

Gastric Secretion

The process of producing and releasing fluids such as hydrochloric acid and digestive enzymes by the stomach's glands to aid in digestion.

Cholecystokinin

A hormone that stimulates the digestion of fat and protein by facilitating the digestion and slowing the rate of stomach emptying.

Gastric Secretion

is the process of producing and releasing fluids by the gastric glands in the stomach, including acid, enzymes, and mucus.