SIE practice questionmediumInsider Trading
A corporate officer’s friend trades based on a tip about pending earnings that is not yet public. This is an example of:
- AAllowed if no profit is realized
- BPermitted if the friend is not an employee
- CLegal if the friend is a family member
- DTipping and illegal insider trading✓ Correct answer
Explanation
Why D — Tipping and illegal insider trading
Providing a tip (tipping) of material, nonpublic information, and trading on it, is illegal insider trading regardless of the tippee’s employment or profit.
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