Securities Exchange Act of 1934

Securities Exchange Act of 1934 - another person who is...

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Securities Exchange Act of 1934, Section 21A Basic legal facts about “inside trading”: Definition (edited quotation): An inside trader is any person who purchases or sells a security while in possession of material, nonpublic information or who communicates such information in connection with a transaction on or through the facilities of a national securities exchange or from or through a broker or dealer. Penalty: The penalty is no more than three (3) times the profit gained or the loss avoided from the infraction of inside trading, with a maximum of one million dollars in the case of a supervisor whose controlled parties engage in inside trading. Responsibility of supervisors: (1) No one can be penalized solely by reason of employing
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Unformatted text preview: another person who is subject to the penalty. (2) But supervisors can be held responsible if (a) they knew or recklessly disregarded the fact that persons under their control were likely to engage in inside trading and failed to take appropriate steps to prevent such acts before they occurred, and/or (b) knowingly or recklessly failed to establish, maintain, or enforce policies against inside trading and such failure contributed substantially to or permitted the occurrence of the act. Statute of limitations: 5 years Bounty: 10% of the penalty assessed by the Securities and Exchange Commission for information leading to the conviction of inside traders...
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This document was uploaded on 04/06/2008.

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