Fact Pattern 31-3 Dhani, an Accountant for Eureka, Inc., Learns of Undisclosed Company

question 60

Multiple Choice

Fact Pattern 31-3
Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know that Fay got her information from Dhani. When Eureka publicly announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
-Refer to Fact Pattern 31-3. Under the Securities Exchange Act of 1934, Fay is most likely

• A) liable for insider trading.
• B) not liable because Fay did not prevent others from profiting.
• C) not liable because Fay did not solicit information from Dhani.
• D) not liable because Fay does not work for Eureka.

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Definitions:

Cultural Influences

The impact of societal beliefs, customs, practices, and behaviors on an individual or community.

Emotional Development

Refers to changes in feelings, emotional reactions, and understanding of emotions over the lifespan.

Express Positive Emotions

Involves the ability to convey feelings of happiness, satisfaction, love, and joy through verbal and non-verbal communication.

Cultural

Relating to the ideas, customs, and social behavior of a society or a specific group of people.