Fact Pattern 42-1B (Questions B12-B13 Apply)

question 7

Multiple Choice

Fact Pattern 42-1B (Questions B12-B13 apply)
Dhani, an accountant for Eureka! Inc. learns of undisclosed com?pany plan?s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re?veals the company plans to Fay, who tells Geoff. Both Fay and Geoff buy 100 shares. Geoff knows that Fay got her informa?tion from Dhani. When Eureka! publicly an?nounces its new laptop, Dhani, Fay, and Geoff sell their stock for a profit.
-Refer to Fact Pattern 42-1B. Under the Securities Ex?change 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.