Donahue, an accountant for Tikki Tech Inc. learns of undisclosed company plans to market a new laptop. Donahue buys 1,000 shares of Tekki Tech stock. He reveals the company plans to Fran, who tells George. Both Fran and George buy 100 shares. George knows that Fran got her information from Donahue. When Tekki Tech publicly announces its new laptop, Donahue, Fran, and George sell their stock for a profit.

12. Refer to Fact Pattern 42-1B. Under the Securities Exchange Act of 1934, Fran is most likely

a. liable for insider trading.

b. not liable because Fran did not prevent others from profiting.

c. not liable because Fran did not misappropriate any information.

d. not liable because Fran does not work for Tekki Tech.

13. Refer to Fact Pattern 42-1B. Under the Securities Exchange Act of 1934, George is most likely

a. liable for insider trading.

b. not liable because George is only a tippee, not a tipper.

c. not liable because George is too far down the chain of disclosure.

d. not liable because George traded on the basis of a material fact.