Hypothetical FINRA Referral Referral Date January 7, 2017 Security Acme, Corp (Ticker ACME) Referral On October 31, 2016, Acme, Corp (Acme) announced its earnings news for the quarter ended September 30, 2016 (the Announcement) The news was announced before the markets opened The closing price of Acme on the previous trading day, October 28, 2016, was $15 24 per share The closing price of Acme on October 31, 2016, was $23 14 per share Acme had announced on September 30, 2016 that it would disclose its earnings numbers by October 31, 2016 Acme is represented in corporate matters by the Law Firm, LLP The Accounting Firm, LLP, audits and reviews Acmes financial statements The Investment Bank Corp facilitates capital raises for Acme FINRA reviewed trading in advance of the Announcement and discovered the following John Doe, age 47, bought 20,000 shares of Acme on October 20, 2016 Doe opened his brokerage account in 2010 at E Trade Financial Corp Based on FINRAs review of the trading records, has bought or sold Acme stock ahead of each of the previous eight earnings announcements Jane Smith, age 25, bought 20,000 call options at a strike price of $17 00 per share, on October 10, 2016 The exercise date of the call options is October 15, 2016 The call options expire on November 15, 2016 This means that Smith has the right to buy Acme stock at $17 00 per share (regardless of the actual stock price) between October 15 and November 15, 2016 Smiths brokerage account is held at Scottrade, Inc Based on a review of trading records, Smith had not previously purchased Acmes stock Date of Awareness of Earnings News The Law Firm, LLP Name Date of Awareness Phone Number Associate 1 October 1, 2016 555 235 2140 Associate 2 October 1, 2016 555 235 2141 Associate 3 October 1, 2016 555 235 2142 Associate 4 October 1, 2016 555 235 2143 Associate 5 October 21, 2016 555 235 2144 Associate 6 October 21, 2016 555 235 2145 Partner 1 October 1, 2016 555 235 2146 Partner 2 October 1, 2106 555 235 2147 Partner 3 October 1, 2016 555 235 2148 Partner 4 October 28, 2016 555 235 2149 The Accounting Firm, LLP Name Date of Awareness Phone Number Associate 1 September 28, 2016 555 210 1234 Associate 2 September 28, 2016 555 210 1235 Associate 3 September 28, 2016 555 210 1236 Manager 1 September 25, 2016 555 210 1237 Manager 2 September 25, 2016 555 210 1238 Manager 3 September 25, 2016 555 210 1239 Partner 1 October 1, 2016 555 210 1240 Partner 2 October 2, 2016 555 210 1241 Partner 3 September 25, 2016 555 210 1242 The Investment Bank Corp Name Date of Awareness Phone Number Banker 1 September 28, 2016 555 211 1234 Banker 2 September 28, 2016 555 211 1235 Banker 3 September 28, 2016 555 211 1236 John Doe Phone Number 555 123 4567 Jane Smith Phone Number 555 765 4321 1 Submit an Excel file in which you have a done a VLookup by comparing the traders' phone records to the Table 2 Submit an Excel file in which you have prepared a pivot table concerning all of the calls made by the traders' on the day before they each traded 3 Submit an Excel file in which you have done a VLookup comparing the traders phone records to each other 4 Based on this analysis, please provide theories on how, if at all, the traders may have received material, nonpublic information HINT for each trader, there are two (2) theories supported by the phone record analyses

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Hypothetical FINRA Referral Referral Date: January 7, 2017 Security: Acme, Corp. (Ticker: ACME) Referral: On October 31, 2016, Acme, Corp (Acme) announced its earnings news

Hypothetical FINRA Referral

Referral Date: January 7, 2017

Security: Acme, Corp. (Ticker: ACME)

Referral:

On October 31, 2016, Acme, Corp (Acme) announced its earnings news for the quarter-ended September 30, 2016 (the Announcement). The news was announced before the markets opened. The closing price of Acme on the previous trading day, October 28, 2016, was $15.24 per share. The closing price of Acme on October 31, 2016, was $23.14 per share. Acme had announced on September 30, 2016 that it would disclose its earnings numbers by October 31, 2016.

Acme is represented in corporate matters by the Law Firm, LLP. The Accounting Firm, LLP, audits and reviews Acmes financial statements. The Investment Bank Corp. facilitates capital raises for Acme.

FINRA reviewed trading in advance of the Announcement and discovered the following:

John Doe, age 47, bought 20,000 shares of Acme on October 20, 2016. Doe opened his brokerage account in 2010 at E*Trade Financial Corp. Based on FINRAs review of the trading records, has bought or sold Acme stock ahead of each of the previous eight earnings announcements.
Jane Smith, age 25, bought 20,000 call options at a strike price of $17.00 per share, on October 10, 2016. The exercise date of the call options is October 15, 2016. The call options expire on November 15, 2016. This means that Smith has the right to buy Acme stock at $17.00 per share (regardless of the actual stock price) between October 15 and November 15, 2016. Smiths brokerage account is held at Scottrade, Inc. Based on a review of trading records, Smith had not previously purchased Acmes stock.

Date of Awareness of Earnings News

The Law Firm, LLP

Name	Date of Awareness	Phone Number
Associate 1	October 1, 2016	555-235-2140
Associate 2	October 1, 2016	555-235-2141
Associate 3	October 1, 2016	555-235-2142
Associate 4	October 1, 2016	555-235-2143
Associate 5	October 21, 2016	555-235-2144
Associate 6	October 21, 2016	555-235-2145
Partner 1	October 1, 2016	555-235-2146
Partner 2	October 1, 2106	555-235-2147
Partner 3	October 1, 2016	555-235-2148
Partner 4	October 28, 2016	555-235-2149

The Accounting Firm, LLP

Name	Date of Awareness	Phone Number
Associate 1	September 28, 2016	555-210-1234
Associate 2	September 28, 2016	555-210-1235
Associate 3	September 28, 2016	555-210-1236
Manager 1	September 25, 2016	555-210-1237
Manager 2	September 25, 2016	555-210-1238
Manager 3	September 25, 2016	555-210-1239
Partner 1	October 1, 2016	555-210-1240
Partner 2	October 2, 2016	555-210-1241
Partner 3	September 25, 2016	555-210-1242

The Investment Bank Corp.

Name	Date of Awareness	Phone Number
Banker 1	September 28, 2016	555-211-1234
Banker 2	September 28, 2016	555-211-1235
Banker 3	September 28, 2016	555-211-1236

John Doe Phone Number: 555-123-4567

Jane Smith Phone Number: 555-765-4321

1. Submit an Excel file in which you have a done a VLookup by comparing the traders' phone records to the "Table."

2. Submit an Excel file in which you have prepared a pivot table concerning all of the calls made by the traders' on the day before they each traded.

3. Submit an Excel file in which you have done a VLookup comparing the traders phone records to each other.

4. Based on this analysis, please provide theories on how, if at all, the traders may have received material, nonpublic information. HINT: for each trader, there are two (2) theories supported by the phone record analyses.