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Ben a director of a company finds out that the co he is working for is operating at a loss. He sells all his shares amd tells his sister who also holds shares in the same co about it and told her not to tell anyone. His sister did not sell her shares but told her friend Frank about the loss and frank sold his shares.
Q. Is the sister and Frank guilty of insider trading..?Grace, beware responses on these pages that are not from me! Humai, over this last 4 -6 weeks has asked on this forum approximately 75% of the questions posted so (s)he is not the ideal person from whom to take advice
Humai, please do NOT post answers on this forum
Grace, Frank is guilty IF he was aware that the sister is related to Ben and IF he was aware that Ben is a director
If Frank either doesn’t know that the sister is Ben’s sister or doesn’t know that the sister’s brother is a director, then Frank could / should avoid being found guilty
Ben’s sister has committed the offence of passing on inside knowledge KNOWING that it comes from Ben and KNOWING that Ben is a director
So the sister IS guilty (as also obviously is Ben)
As for proof … there’s the rub. The only possible connection to the sister is if Frank, if his transaction is investigated, says that he got the information from the sister
OK?
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