"Someone you know has knowledge of an impending merger between two companies. The combination of the two firms will certainly change the market dynamics of the industry. Moreover, owners of stock in both companies will greatly benefit once the news of the merger is publicly announced."

• Discuss the general basics of the regulatory rules applying to insider trading and its implications and address the following:

1. Legal implications
2. Ethical implications
3. Economic-social implications

At least 5 points for each implication.