Law · Financial Crimes
A fund manager acquires non-public, price-sensitive information concerning a company takeover from a market trader and subsequently executes trades based on that information. Is the fund manager guilty of insider trading?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Yes, but only if the executed transactions result in a net financial profit
- 2No, because only the initial informant can be prosecuted for insider trading
- 3Yes, because he traded on the basis of material, non-public price-sensitive information✓
- 4No, because the source was a market trader and the information will eventually become public
Correct answer
Yes, because he traded on the basis of material, non-public price-sensitive information
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