Question

Charles, the president of an IT company, is friends with Levi, the CEO of Cyber Industries, a company that develops and manufactures computer hardware. Levi tells Charles that Cyber Industries is about to announce the creation of a revolutionary new computer processor that will quadruple processing capacity and cause Cyber Industries’ sales and profits to skyrocket. Charles then purchases a large number of shares of Cyber Industries company stock before the news of the new computer processor is made public. In which illegal activity has Charles engaged

a. A Ponzi scheme.

b. Short selling.

c. issuing is call.

Answer 1

Answer:

Insider Trading

Explanation:

Based on the information provided in regards to the situation at hand, it can be said that Charles is engaged in Insider Trading. Insider Trading is when an individual purchases stocks in order to make a profit using information that only a handful of people know about, gathered from private knowledge within a company. Which is exactly what Charles is doing.