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Insider Trading at the Gallop

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Insider Trading in the Gallop Inc Case
Facts
1) Gallop Inc. predicted third quarter earnings of 45cents per share.
2) A likely material litigation of $10m was made against Gallop Inc concerning personal injury on a 9years old boy who was allegedly injured while using Gallop Inc. most popular product.
3) A press release was to be made. But before it was released, the VP Marketing, a director and an outside counsel sold their Gallop shares at the prevailing market price.
4) A copy of the soon to be publicly disclosed press release on this claim fell into the hands of the Collin, who runs the copy machines for Gallop.
5) He contacted his broker, Brown and told her about the press release and told her to sell his shares of Gallop stock.
6) Brown, contacted his client, Calloway and suggested that she sell her Gallop stock. No reason was offered as to why the shares should be sold.
7) After the press release was made public, Gallop shares fell by about $5.
Issue
Of the people who made pre-announcement trades, who is liable for carrying out insider trading and on what basis are they liable.
Opinion
In this case, these are the people who were involved and their relationship to Gallop as at the time the pre-announcement trade was made.
VP Marketing Officers have a fiduciary obligation of loyalty and care to the corporate shareholders. VP is an insider
Director Directors have a fiduciary obligation of loyalty and care to the corporate shareholders. Director is an insider
Outside Counsel Are also considered insiders with a duty to the company.
Collin As agents or servants of a corporation, employees have a duty of loyalty. Collin is an insider.
Brown Brown has a duty to Collin not to divulge the information he has just received which Brown knows is confidential. Brown is more or less an outside counsel. Brown is an insider.
Calloway Calloway was not told

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