Fact Pattern 21-3 (Questions 23-26 Apply)

question 44

Multiple Choice

Fact Pattern 21-3 (Questions 23-26 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 buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know 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 21-3. Under the Securities Ex?change Act of 1934, Geoff is most likely

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

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Definitions:

Covertly

Done in a hidden or concealed manner.

Directly Confronting

A communication approach where issues or conflicts are addressed openly and straightforwardly.

Alternative View

Considering or presenting a different perspective or approach to understanding a situation, problem, or concept.

Impaired Reality Testing

A psychological condition where an individual has difficulty distinguishing between what is real and what is not, often seen in psychotic disorders.