Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Tim works for a supplier of parts to a company named Robots Inc. (ROBOT). When Tim delivers parts one of his friends at ROBOT tells him about how the company's sales have tripled in the past quarter. Tim decides to buy 5,000 shares of ROBOT stock the day before the company announces its earnings. Following the earnings announcement, the stock price does not change...in fact, strangely, it goes down. Tim ends up losing over $1,000 on ROBOT stock, by the time he sells his shares. Based on current securities law in the United States, which of the following statements is most true? Group of answer choices Tim's intent was to conduct an illegal insider trade. However, since he did not make a profit on the transaction, he will most likely not be found guilty of insider trading. Everything Tim did was totally legal in the United States. Tim's trade is considered legal and is not considered an insider trade because Tim does not work for ROBOT. Tim is guilty of illegal insider trading and will likely go to jail.
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