Series 79 practice questionmediumMNPI and Insider Trading
Under the misappropriation theory of insider trading, which of the following individuals could be liable for insider trading?
- AAn attorney who steals MNPI from a client and trades on it✓ Correct answer
- BA company CFO who trades on their own company’s public filings
- CA journalist who publishes publicly available research
- DA retired employee who has no current access to MNPI
Explanation
Why A — An attorney who steals MNPI from a client and trades on it
Misappropriation theory holds that individuals who steal or misuse MNPI in breach of a duty of trust and confidence, such as an attorney, are liable. The other scenarios do not involve a breach or use of MNPI.
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