SIE practice questioneasyInsider Trading
An employee at a public company buys shares based on confidential earnings information not yet released to the public. This is an example of:
- AChurning
- BBest execution
- CFront-running
- DIllegal insider trading✓ Correct answer
Explanation
Why D — Illegal insider trading
Trading on material nonpublic information is illegal insider trading. Best execution relates to trade quality, front-running is trading ahead of client orders, and churning is excessive trading for commissions.
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