Insider-Trading Prevention Quiz

Insider-Trading Prevention Quiz

Stay out of trouble. Test your knowledge of the securities laws that apply to stock compensation. (For more educational materials about insider trading, see the Think Twice video series, produced by our sister company Brumberg Publications.)

Please answer the following 10 questions. This quiz is also a course of study. The answer key links to content on the topic for follow-up reading.

1. Which of the following is insider trading?

2. While feeling good at a family party, you tell your brother-in-law that your company is about to announce a big deal with Microsoft. What are you guilty of?

3. What is a blackout period?

4. What would probably not be considered insider trading during a blackout period if you knew inside information?

5. What arrangement can you make to provide an affirmative defense against charges of insider trading?

6. Which members of a company are affiliates subject to special SEC filings for their stock sales?

7. Under Section 16 and Rule 144, what SEC form(s) must executives and directors file when they exercise stock options and sell all the shares?

8. During what period after a purchase or sale must executives and directors avoid a corresponding opposite transaction to avoid short-swing-profit liability?

9. What is the maximum civil penalty for insider trading?

10. What was Martha Stewart convicted of?

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