Which of the following would be likely to result in liability to a director of a textile company? The director:
A) sells stock in the textile company before a merger is announced.
B) buys stock in the textile company using the computer in the office of the company.
C) owns stock in an automobile company.
D) agrees to hire as president a man he has not personally investigated.

Question

Quizplus · Accepted Answer

Selling stock before a merger is announced could be considered insider trading, which is illegal and could result in liability for the director. Buying stock using the company's computer is not necessarily illegal, owning stock in another company is not a problem, and agreeing to hire someone without personally investigating them is not illegal, although it may be unwise.

Which of the Following Would Be Likely to Result in Liability