BS Law Exam IIQ10

BS Law Exam IIQ10 - trading stock based upon that...

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BS Law Exam II, Q 10 James Tilley BAA 3210 When Mary informed her friend of the improvements being made to the computer systems this made her a tipper. A tipper is a person that discusses nonpublic information to another person. When Mary’s friend received the information they became a tippee. A tippee is the person that receives the nonpublic information from a tipper. When Mary’s friend passed the information along to her friends now she became a tipper. The tipper, tippee, and the two other persons are all liable because the information was nonpublic and a profit was made. If the information had been made public and this had taken place it would have been legal. There actions and profits were made upon inside information similar to trade secrets. The action of all four parties are illegally and liable for the Insider trading is basically using internal knowledge not known to the public and
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Unformatted text preview: trading stock based upon that information. The reason insider trading is fraud is the person is trying to gain something of value and neglects the legality of the situation. Martha Stewart was accused of insider trading, by receiving a tip by CEO Sam Waksal. The stock that in question was ImClone, and sale of the stock rose sharply and Martha tried to sell her stock. One thing that was discussed was the fact that just two months earlier Martha tried to sell all of her stock then. The government could not charge Martha Stewart with insider trading, based on a sheer lack of evidence; they decided to go after her for other alleged misdeeds. This is where the tipper and the tippee concept came in it still offered a way to convict the two. Martha Stewart was found guilty of obstructing justice and lying to investigators about the information about the stock trades....
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