SIE practice questionmediumInsider Trading
Which of the following best illustrates an 'insider' engaging in illegal insider trading?
- AA shareholder selling after a press release
- BA financial news reporter buying shares after public announcements
- CA director buying shares upon learning confidential earnings before public release✓ Correct answer
- DA broker executing a limit order as instructed
Explanation
Why C — A director buying shares upon learning confidential earnings before public release
Illegal insider trading occurs when corporate insiders trade based on material non-public information. Publicly available information does not constitute insider information. Following customer instructions is not insider trading.
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