Robert is the vice president of a medium size corporation that operates retail sporting goods

Question

stores in seven states. Robert has considerable stock that he purchased and received over the
years while working there.

Robert has purchased no stock for the last three years because all his
excess funds have gone for college expenses for his oldest son. Robert's daughter will begin
college in the fall, and Robert needs to sell some stock. Robert knows that one of the retail
locations where the corporation owns the real estate was once used as a toxic dump. The
corporation is legally obligated to clean up this site, and the costs will have a material effect on
the corporation's net income for several years. This information is not yet public. Robert can:
A) Sell his stock only if he tells the purchaser about the liability for cleaning up the toxic
waste.
B) Sell his stock only if he gets prior clearance from the Securities and Exchange
Commission.
C) Sell his stock only to an accredited investor.
D) Freely sell his stock without any liability because it has been more than six months since
he purchased any stock.
E) Not sell his stock under any circumstances until the information about the toxic waste
becomes public.

Answer 1

A