Question

Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu, each of whom buy 100 shares. They knows that Fay got her information from Dhani. When Eureka publicly announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.Under the Securities Exchange Act of 1934, Fay is most likely________.

Answer 1

Answer:

Insider trader

Explanation:

All of them, Dhani, Fay, Geoff and Hu, can be considered insider traders since they used private information (not disclosed to public investors) about the company's plans to earn money.

The Securities Exchange Act of 1934 Section 10(b) was enacted in order to  prosecute this type of actions.