Which of the Following Is NOT True Regarding the Misappropriation

question 55

Multiple Choice

Which of the following is NOT true regarding the misappropriation theory of insider trading?

• A) If a trader discloses to a source of nonpublic information that he or she plans to trade on the basis of that information,there is no violation under the misappropriation theory.
• B) Liability under the misappropriation theory requires deception.
• C) The misappropriation theory widens the class of persons who can be found liable for insider trading.
• D) The trader cannot be held liable unless he or she is an insider of the company whose securities are traded.

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Definitions:

Ethical Responsibilities

Refers to the duties and obligations individuals or organizations have to act in ways that are morally right and beneficial to society.

Social Welfare

Organized public or private social services intended to aid disadvantaged, distressed, or vulnerable individuals or groups.

Psychological Harm

Damage inflicted on an individual’s mental health or well-being, including emotional distress, anxiety, or trauma.

Informed Decisions

Decisions made based on a thorough understanding of all relevant information, implications, and consequences.