Fact Pattern 41-1A

question 72

Multiple Choice

Fact Pattern 41-1A
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 buys 500 shares. Fay tells Geoff, who tells Hu, each of whom buy 100 shares. They knows that Fay got her informa?tion from Dhani. When Eureka publicly an?nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
-Refer to Fact Pattern 41-1A. Under the Securities Ex?change Act of 1934, Hu is most likely

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

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Definitions:

New Coke

A product launched by Coca-Cola in 1985 as a reformulated version of its original soft drink, which faced significant public backlash leading to a marketing and business learning case.

Crystal Pepsi

A clear version of Pepsi soda that was marketed in the early 1990s, aiming to offer a novel experience to consumers.

Pathways

Refers to the routes or courses of action that can be taken in order to achieve a specific goal or outcome.

Opportunity Identification

The process of finding new prospects or possibilities for business and economic growth.