Susan is a reporter for the Wall Street Journal and she publishes a weekly column called "Word on Wall Street." Her area of journalistic expertise involves businesses and financial investments. She speaks to stock brokers frequently in her line of work but, as a reporter, has no direct involvement with the operations of any publicly traded company. [However, given her knowledge of many clear corporate policies imposed by the WSJ upon its employees, Susan is an insider of the WSJ with a fiduciary duty to the WSJ to comply with its policies.]

In the course of her work, Susan befriends a stock broker named Hank. Hank eventually realizes that Susan knows financial news before the public does, at least to the extent that she investigates and writes her weekly column before it is ultimately published in the paper. He starts to fish for information from Susan that hasn't yet gone to print. Susan declines at first, explaining to Hank that the WSJ's company policies prohibit such sharing. But Hank is persistent and charming and Susan eventually caves, offering him bits of info here and there that she thinks may help him. Eventually, she learns that Hank has been able to successfully leverage that information to make profitable trades on the market just before her column goes to print. She presses Hank to share some of those profits with her, and he agrees, so long as she keeps funneling him the information she gathers on the job as a reporter. Susan figures there is no harm, since the column will be published eventually, and she is the one who did the hard work digging up the information for her reports. Hank reassures her, too, that they can't get in trouble, because he isn't even an "insider" anyway, and he is the one doing the actual trades, not her.

The SEC disagrees and has Susan and Hank arrested and prosecuted for securities fraud. The SEC alleges that Hank, as the tippee, committed insider trading when he engaged in the course of conduct set forth above.