SIE practice questioneasyInsider Trading
A CEO buys stock of her company after learning undisclosed, positive financial results. What rule does this violate?
- ARegulation S
- BRegulation A+
- CInsider trading prohibitions under the Securities Exchange Act of 1934✓ Correct answer
- DInvestment Company Act of 1940
Explanation
Why C — Insider trading prohibitions under the Securities Exchange Act of 1934
Using material nonpublic information for personal gain is insider trading, prohibited by the Exchange Act of 1934. Regulation A+ and S address exempt securities and offerings, not trading on inside info. The Investment Company Act governs mutual funds.
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