A drug company applied for the approval of the Food and Drug administration (FDA) to market a miracle drug that the company believed could cure some cancers.During the period that the application was under consideration, the company's stock rose to $65 per share. The president of the company learned that the FDA application was about to be denied.You are a personal friend of the president and he told you that he believed that the stock will start trading downward.You sell 4,000 shares of stock, which you purchased for$10 per share.Your decision appears to be a good one because you made a profit of about $200,000.When questioned about the sale by an investigator from the Securities Exchange Commission, you state that the sale was because of a preexisting arrangement to sell the shares when they fell below $60 per share.Following the announcement that the FDA application was denied, the stock went to $7 per share.

Did you commit a crime when you sold the stock?

Did you commit a crime in your answer to the federal agent?

Were you a part of an illegal conspiracy?