Dave,an Accountant,does Not Work for Emergent Company,but Wrong?fully Obtains Inside

question 14

Multiple Choice

Dave,an accountant,does not work for Emergent Company,but wrong?fully obtains inside information concerning Emergent.Based on the in?forma?tion,Dave buys and sells Emergent stock for personal gain.The Securities and Exchange Commission prose?cutes Dave,arguing that he is liable because he stole in?formation right?fully belonging to another.This argument is

• A)the blue-sky theory.
• B)the misappropriation theory.
• C)the red-herring theory.
• D)the tipper/tippee theory.

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Definitions:

Market Price

The current price at which an asset or service is bought or sold in the open market.

Corporate Resolutions

Formal decisions or actions taken by the board of directors of a corporation during a meeting.

Board of Directors

A group of individuals elected by the shareholders to oversee the activities and governance of a corporation.

Corporate Powers

Legal authorities and capacities granted to a corporation by law, including entering into contracts, owning assets, and issuing stock.