c. Upheld Chiarella\'s conviction for Insider Tradi 1d. Ruled that Chiarella cou
ID: 381954 • Letter: C
Question
c. Upheld Chiarella's conviction for Insider Tradi 1d. Ruled that Chiarella could not trade on non-pu duties to companies' shareholders his about the company to without obtaining any advantage for 4. In case of Dirks v. SEC the Supreme Court held that: Dirks could not be liable for tipping non-public information clients because Secrist revealed the scandal to Dirk without himsel a. ys clients for b. Dirks violated Rule 10b-5 because he revealed the scandal to his compan c Dirks was liable for breach of fiduciary duty to the company's shareholders d. Dirks job as securities analyst precluded him from sharing any inside information personal gain because his clients dumped their stock before the scandal became public outside tippees under the "confidentiality" rule 5. In United Stotes V. O'Hagan, the Supreme Court: Ruled that O'Hagan was not liable for securities fraud Ruled that O'Hagan did not violate insider trading rules because he did not have a fiduciary duty to the company's shareholders Validated the misappropriation theory Ruled that the misappropriation theory did not apply a. b. c. d. 6. A "blackout period" is A period when the company's stock price is lower than the exercise price of its outstanding stock options A period of stock-trading activity a Company employee cannot remember during an SEC interview a. b. c. A period when a company prohibits its insiders from buying or selling its stock d. A period when a company prohibits its insiders from exercising their stock options 7. Who are considered "affiliates" subject to special SEC restrictions on their sales of company stock? a. All company employees b. The CEO and CFO only C. The board of directors d. Executives, directors, and large-block shareholdersExplanation / Answer
4. d.
Dirks was found guilty of insider trading as he revealed inside information of his company to outside tippees.
5. c.
In this case the Supreme Court had upheld the validity of theory of misappropriation and tried to adopt a broader meaning of Section 10(b) and Rule 10b-5.
6. c.
A ‘blackout period’ is a time period in which a company’s employees possess certain inside information (not known by the general public) and hence are prevented from purchasing or selling their stocks. This is done to ensure that no insider trading occurs.
7. d.
‘Affiliates’ are persons who wield some control over a company. Here control refers to the power of influencing the management or have a say over the company policies and this power usually lies with the large-block shareholders, directors or executives. These persons have certain restrictions (generally subject to Section 16(a) and Rule 144) imposed by SEC regarding sales of their company stocks.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.