SIE practice questionhardInsider Trading
The penalties for willful insider trading violations may include which of the following?
- AA warning letter only
- BA temporary ban from mutual funds only
- CWaiving all profits to the IRS
- DFines up to three times the profit gained or loss avoided, and criminal prosecution✓ Correct answer
Explanation
Why D — Fines up to three times the profit gained or loss avoided, and criminal prosecution
Penalties for insider trading can be severe: civil fines up to 3x the gain/loss avoided and possible prison. The other options minimize or misstate the possible penalties.
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