DON'T BE GUILTY OF TRADING INSIDE INFORMATION TO MAKE A QUICK BUCK

Over the years there have been some securities professionals whom the SEC has accused of illegally using inside information to make gains on trading stocks. Don't allow yourself to fall into this trap. It would ruin your career in the securities business, as well as subject you to fines, civil penalties, and even criminal convictions.

NASAA specifies in its Test Specifications and Content Outline for the Series 66 exam that you should expect questions about Trading on Inside Information. See NASAA's Series 66 Test Specifications, Section IV (H) (4).

Bob Eder discusses Trading on Inside Information in detail in his Study for the Series 66 Exam. Here is a sample of Bob Eder's treatment of using inside information:

EXAMPLE

Jason, a hedge fund manager, is managing several billions of client monies. He asks for and receives confidential information about XYZ Corp.’s forthcoming earnings from Bill, a friend, who happens to be on XYZ’s board. Bill tells Jason that XYZ will unexpectedly report very good earnings. Five minutes after his conversation with Bill, Jason instructs his traders to purchase 100,000 shares of XYZ. Later, investigations show that many of the investors who sold XYZ shares to Jason’s firm were small mom-and-pop investors. Would they have sold their XYZ shares to Jason if they had known of the forthcoming earnings bonanza?

Here is the link to NASAA's Content Outline and Test Specifications for the Series 66 exam. See Section IV (H) (4) on Trading on Inside Information.

Study for the Series 66 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's book on Amazon.

For questions about Bob Eder's Series 66 study manual, Study for the Series 66 Exam, or questions in general about the Series 66 exam, such as Trading on Inside Information, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. See Bob Eder's Author Page on Amazon.com.