David works in the mergers and acquisitions department of Bull & Bull, an investment bank. One of the bank's clients, Raptor Ltd, is planning a takeover of Meat Packaging Ltd, a public listed company. David is tasked with preparation of the feasibility study. Based on his research, he concludes that Raptor should proceed with the takeover and offer shareholders of Meat Packaging $6 per share. The shares of Meat Packaging are at that time trading on the ASX at around $4 per share. The directors of Raptor agree with his recommendation and proceed with the takeover. David informs his wife, Carol, about the proposed takeover and the recommended price. Carol buys 20,000 shares in Meat Packaging at $4.15 per share before the takeover is announced. When news of the takeover is reported in the press, the price of Meat Packaging shares surge and she makes a healthy profit selling her 20,000 shares.

Advise David and Carol (with reference to the relevant provisions of the Corporations Act) whether they would be liable for insider trading and, if they are liable, the legal consequences that they would face.