Series 79 practice questionmediumMNPI and Insider Trading
Under Regulation FD, when must a public company disclose material nonpublic information that was inadvertently disclosed to a select group of analysts?
- APromptly, typically within 24 hours, via a broadly disseminated method such as a press release or SEC filing✓ Correct answer
- BOnly at the next quarterly earnings call
- COnly if the analysts trade on the information
- DNo disclosure is required if the information is not used in trading
Explanation
Why A — Promptly, typically within 24 hours, via a broadly disseminated method such as a press release or SEC filing
Reg FD requires prompt public disclosure of any inadvertent selective disclosure of MNPI, usually within 24 hours. Waiting for a scheduled call or only acting if trading occurs does not satisfy the requirement and could expose the company to sanctions.
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