Ken Hastings is hosting a backyard cookout for some of his neighbors. One of the invitees is Steve Chen, whose wife, Judith Chen, is the CEO of New World Industries. During the cookout, Steve received a call from his wife, who is out of town on business.

Upon returning to the barbecue after the call, Steve's demeanor has clearly changed and he seems unusually happy. Ken and Tim Daniels listen to what Steve reports. Steve tells his neighbors that Judith was out of town working on a very important settlement, and that her efforts have paid off.

Assume Ken Hastings (cookout host) and Tim Daniels (Ken's tennis partner) both bought stock in New World Industries as soon as the market opened on Monday and all profited 30% after the press announcement by Mrs. Chen. Pursuant to their agreement, Tim Daniels paid Ken Hasting 5% of the profit he made on the transaction.

• With regard to Judith Chen, Steve Chen, Ken Hastings and Tim Daniels, which of these parties could be considered an "insider" under rule 10(b)(5) of the Securities Act of 1934? Explain why or why not.
• Which of these parties could have tipper or tippee liability in this case?
• Did Judith Chen's actions in telling her husband about the settlement breach her fiduciary duty?
• Who actually obtained a personal benefit from the tip and how?