SIE practice questionhardInsider Trading - Tippers and Tippees
A non-employee receives material, nonpublic information from an insider and trades on it. Under the law:
- ANo one is liable unless the company loses money
- BOnly the insider is liable
- CBoth the insider and the trader may be liable for insider trading✓ Correct answer
- DOnly the company is liable
Explanation
Why C — Both the insider and the trader may be liable for insider trading
Both tipper and tippee can be liable for trading on inside information, regardless of company losses. The company itself is not liable unless complicit.
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