Rita: I just got a hot tip from my brother to buy stock in McQ Corp.
Rick: Your brother works for McQ Corp., doesn’t he?
Rita: Yeah, he’s a director in the company, so he should know if something big is brewing.
Rick: If he’s a director and he knows something that isn’t publicly disclosed about the company, and he’s telling you to buy stock, isn’t that insider trading?
Rita: Insider trading?! I’m not a major investor. I don’t plan to buy so many shares that I’ll become a major shareholder. All I can afford are a few shares.
Rick: Still, he’d be considered a corporate insider and may be breaching his fiduciary responsibilities. Giving you this tip could get him, and you, into a lot of trouble.
Rita: Who are you, an SEC regulator? People do this kind of thing all the time, and there’s nothing shady about it. If you’re smart, you’d buy a few shares yourself.
Rick: Uh, no thanks. I don’t think I’d look good in an orange jumpsuit.
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