Carla is an accountant for WidgetCo. In the course of her employment, she discovers that WidgetCo’s application for a patent has been approved. Before the news is announced publicly, she calls her neighbor Sam, tells him about the patent, and instructs him to buy as much WidgetCo stock as possible. The two agree to split any profit. After the patent news is announced, WidgetCo’s stock price doubles. Which of the following is true?

a. Carla’s tip violated Rule 10b-5, but Sam has no liability.

b. Sam is not liable because he did not benefit from the tip.

c. Carla and Sam both violated Rule 10b-5.

d. Sam violated Section 16 because of a short-swing.

e. Sam and Carla have no liability under the Exchange Act.