Public Information And Insider Trading
Freddie reads an article in the financial section of a local newspaper stating that XYZ Company is in significant trouble for falsifying laboratory results for a new medication. He immediately calls his broker to request the sale of his stock. In this scenario, Freddie is:
AViolating Section 10(b)(5) because he indirectly shared a news article.
BEngaging in insider trading because he is sharing information he learned.
CGaining disproportionately by selling stock, which is illegal.
DEngaging in disgorgement because he is selling his stock.
EDoing nothing wrong, as the information is available to the public.
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