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Insider Trading fall 2022 Flashcards | StudBud

Explore/Insider Trading fall 2022

Insider Trading fall 2022

9 terms·StudBud Administration·292 plays

Insider

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Questions 9

Answers

1
Which of the following is insider trading?
A CEO buys 1,000 shares of stock in a competitor corporation
Employee receiving 500 shares of stock in the company as part of comp.
None of the above.
Selling company's stock because you think it will announce poor earnings.
2
Is insider trading ever legal?
Sometimes
No
Yes
3
The SEC was created in the 1990s to prevent insider trading and other fraudulent activities.
True
False
4
Adam, a CEO, sells stock of the company just before news come out of a failed drug experiment.
Adam commited insider trading
Wait, where is Gilad in all of this?
Adam may be ok if the sale was a planned transaction
Adam did not commit insider trading if didn't give information to a tippee
5
Which is not a disadvatage of Insider Trading?
Improving market efficiency
Stock market risk
Lack of fairness
Stock lemon market
6
I have the right to buy an apple share for $100 in the next 2 weeks (traded currently at $90)
I have a put option out of the money
I have a call option out of the money
I have a call option at the money
I have a put option in the money
7
IT guy Dan sees an email from a banker stating that X is buying Y. Dan buys Y
More facts are needed
Dan may be held liable under the fiduciary theory
Dan may be held liable under the misappropriation theory
Both theories would apply
8
Dan (holds 9% of X) buys 10 shares at $10 on 1/1 and then 10 shares at $12 on 2/1 selling 5 shares at $13 on 3/1
Non of the above
Dan has to disgorge $15
We have to wait until 6 months passed
Dan has to disgorge $5
9
CEO mentions a tender offer Corp X intends to launch to his wife, she then buys shares of X
She is liable under 3 theories
She is liable under 1 theory
She is liable under 2 theories
Depends on their relationship