rita is a waiter at a restaurant in new york citys financial district. as rita is cleaning up the tables…

rita is a waiter at a restaurant in new york citys financial district. as rita is cleaning up the tables following the lunch rush, she finds a signed merger agreement between two large companies. rita shows the restaurant manager, who recognizes that the stock of the company is about to rise significantly. both the manager and rita invest, but the manager was wrong, and they both lose money. which of the following statements is true? by using the nonpublic information, they have committed insider trading, regardless of whether they made a profit. because they did not make a profit, neither the manager nor rita has committed insider trading. neither rita nor the manager has committed insider trading because neither owes a fiduciary duty to the company. rita, because she found the nonpublic information, has committed insider trading but the manager has not.

rita is a waiter at a restaurant in new york citys financial district. as rita is cleaning up the tables following the lunch rush, she finds a signed merger agreement between two large companies. rita shows the restaurant manager, who recognizes that the stock of the company is about to rise significantly. both the manager and rita invest, but the manager was wrong, and they both lose money. which of the following statements is true? by using the nonpublic information, they have committed insider trading, regardless of whether they made a profit. because they did not make a profit, neither the manager nor rita has committed insider trading. neither rita nor the manager has committed insider trading because neither owes a fiduciary duty to the company. rita, because she found the nonpublic information, has committed insider trading but the manager has not.

Answer

Brief Explanations:

Insider trading involves using non - public material information for stock trading. Rita and the manager used non - public information from the merger agreement to invest, and regardless of profit or loss, this is insider trading.

Answer:

By using the nonpublic information, they have committed insider trading, regardless of whether they made a profit.