Question

Riley, an engineer for super seed corporation, learns that super seed has developed a corn hybrid to triple the output of any farm. riley buys 10,000 shares of super seed stock. he tells tess, who buys 5,000 shares. after the new hybrid is announced publicly, the price of super seed stock in-creases. riley and tess sell their shares for a profit. under the securities exchange act of 1934, liability may be imposed on

Answer 1

Both Riley and Tess could face liability under insider trading rules, because they profited off inside/secret business information that was not yet available to the public.