Question

Bart is a lawyer and an employee of Alway, Inc. Bart is representing Alway in its purchase of Steel Co. Bart learns from Alway's company files that Steel Co. is in the final stages of negotiation for a highly profitable five-year contract. Bart uses this nonpublic information to purchase Steel Co. stock, and is handsomely rewarded. Bart will:

Answer 1

Answer:

C. be held liable under the misappropriation theory of insider trading.

Explanation:

Insider trading refers to the practice of utilizing confidential information that is not available for the public in order to make a profit in stock market. Currently, this action is deemed as illegal ever since the  The Insider Trading Sanctions Act was created in  1984 .

The Security and Exchange omission created that act in order to ensure that no investors have to experience unfair situation in the market . Having confidential information will make it really easy for a person to predict whether the price of the stock will go up or down.

This can be seen In Bart's action. Pay attention to this part of the excerpt:

Bart learns from Alway's company files that Steel Co. is in the final stages of negotiation for a highly profitable