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 manufacturer 's revenue Roger mentions to Gordon ...

1 Roger and Gordon would be partaking in insider trading if they ...

Roger and Gordon are middle managers at a large, publicly traded corporation. Roger tells Gordon that the

Question:

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 agreement with a small, publicly traded manufacturer. This contract will quadruple the manufacturer's revenue.
Roger mentions to Gordon that the manufacturer's stock price will likely go ''through the roof. ''Gordon says, ''Maybe we should buy some stock or, better yet, some call options.''

Required:
1. Are Roger and Gordon being smart, being unethical but not breaking the law, or breaking the law?
2. How does the SEC monitor such activity?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...