Answer the following questions, which require you to think critically about the legal principles that you learned in this chapter.

Franken, president of Monarch Pharmaceuticals Incorporated, was one of only three persons who knew that one of the fi rm’s experimental drugs had just been approved by the federal government. The drug had been found to cure several serious diseases. As soon as news of the approval became public, Franken reasoned, the price of the fi rm’s stock would increase substantially. He arranged with a friend to buy thousands of shares of the company’s stock, hoping to sell at a profi t after the price increased as a result of the good news. Can Franken be prosecuted for his actions?