Roger and Gordon are middle managers at a large, publicly traded corporation. Roger tells Gordon that the company is about to sign an exclusive product distribution agreement with a small, publicly traded manufacturer. This contract will quadruple the manufacturers revenue. Roger mentions to Gordon that the manufacturers stock price will likely go through the roof. Gordon says, Maybe we should buy some stock. Questions:

• Are Roger and Gordon being smart, being unethical but not breaking the law, or breaking the law?
• How does the SEC monitor such activity?