Answer:
a. liable for insider trading
Explanation:
THESE ARE THE OPTIONS FOR THE QUESTION BELOW;
a. liable for insider trading. b. not liable because Uri is only a tippee, not a tipper. c. not liable because Uri is too far removed from the initial disclosure. d. not liable because Uri traded on the basis of a material fact.
From the question, we are informed about Ross, who is a sales executive with Steel Mill Inc., learns of undisclosed company plans to produce a new type of steel. Ross tells Tim, who tells Uri, who buys 100 shares of Steel Mill stock. Uri knows that Tim got the information from Ross. When the firm publicly announces its new product, Uri sells the stock for a profit. In this case, Under the Securities Exchange Act of 1934, Uri is most likely liable for insider trading. The Securities Exchange Act of 1934 was set up to govern securities transactions base on secondary market, which when issued it will ensure greater financial transparency as well as accuracy along with less fraud and manipulation. The Act gives empowerment to SEC so the body can require periodic reporting of information from firms with publicly traded securities.
