SIE practice questionhardInsider Trading - SEC Penalties
If an individual is convicted of insider trading, which penalty may the SEC impose?
- ADouble the profit gained only
- BNo monetary penalties, just criminal charges
- CCivil penalties up to three times the profit gained or loss avoided✓ Correct answer
- DA warning for a first offense
Explanation
Why C — Civil penalties up to three times the profit gained or loss avoided
SEC can impose civil penalties of up to three times the improper gain or avoided loss. There are also possible criminal sanctions, but B, C, and D all understate the regulatory power of the SEC.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Prohibited Activities & Ethics questions
- A CEO buys stock of her company after learning undisclosed, positive financial results. What rule does this violate?
- A broker found guilty of front-running may be subject to which consequences?
- Which of the following would be considered illegal insider trading?
- An employee gives nonpublic, material information about a company to a friend who trades on it. What are the roles of…