SIE Exam Question 321: Answer and Explanation

Question: 321

Trader R hears news from an underwriter that his firm will be buying a large block of XYZ Co stock. If R buys shares of the stock before the news is made public, he is engaged in

• A. insider trading.
• B. bid-rigging.
• C. front-running.
• D. rumoring.

Correct Answer: C

Explanation:

C - Front-running is defined as trading on material non-public information ahead of an imminent block sale in the same or related securities