Trading, Accounts & Prohibited ActsQuestion 253 of 398
Illegal insider trading generally involves trading a security while in possession of information that is both:
a.Old and widely reported
b.Material and nonpublic
c.Optimistic and unverified
d.Public and immaterial
Explanation
Insider trading laws prohibit buying or selling securities based on material, nonpublic information (MNPI) in breach of a duty of trust or confidence. 'Material' means a reasonable investor would consider it important; 'nonpublic' means it has not been disseminated to the market.
Law Reference: Securities Exchange Act of 1934Practice all 398 questions free — no signup required.
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