Question

An agent's customer says that ABC Corporation is about to be bought out. The customer wishes to place an order to buy ABC common stock based upon this yet unreleased information, which he claims he learned from an officer in the company. How should the agent respond in this situation

Answer 1

Answer:

Explanation:

In this specific scenario, the best thing for the agent to do would be to bring the information to the attention of the firm's supervisory principal named to handle such matters in a Supervisory Procedures Manual. That is because inside information or insider trading is illegal and even though it does not need to be reported to the state securities Administrator, it should still be handled by the firm's supervisory principal in order for it to be handled correctly so that the firm does not get into trouble.