Question

an equipmentshare employee learns about an upcoming significant acquisition that hasnt been announced yet. they consider selling their shares before the news is public. what should the employee do next?

• sell the shares since the information is not confirmed.
• trade as long as its outside a blackout period.
• do not trade and contact the legal department for guidance.
• ask a friend to trade on their behalf.

Explanation:

Analyze the scenario and legal implications

The employee has learned about an upcoming significant acquisition that has not been announced to the public. This information is material and nonpublic. Trading on or tipping others about material nonpublic information (MNPI) violates insider trading regulations and corporate compliance policies.

Evaluate the options

• Option 1: Selling shares based on unannounced material information is illegal insider trading.
• Option 2: Even outside a blackout period, trading while in possession of material nonpublic information is prohibited.
• Option 3: Refraining from trading and consulting the Legal department is the correct, compliant procedure to avoid insider trading violations.
• Option 4: Having a friend trade on one's behalf based on MNPI is illegal tipping and insider trading.

Answer:

• Sell the shares since the information is not confirmed.
• Trade as long as it's outside a blackout period.
• Do not trade and contact the Legal department for guidance. (Correct answer)
• Ask a friend to trade on their behalf.