Which statement about the conditionalities for insider dealing is NOT true?

Which statement about the conditionalities for insider dealing is NOT true?

• A. The information has to be specific
• B. The information needs to be non-public
• C. The information, if released, would have a significant impact on the price
• D. The information must be widely disseminated to the market

Answer: (D)

Inside information for insider dealing must be precise, non-public, and price-sensitive—meaning its release would likely move the price of the security. The key point here is that information being widely disseminated to the market would make it public information, not insider information. If the information is already public, trading on it isn’t insider dealing. So the statement that information must be widely disseminated to the market is not true. The other conditions—being specific, non-public, and capable of significantly affecting the price—are consistent with insider dealing rules.

Inside information for insider dealing must be precise, non-public, and price-sensitive—meaning its release would likely move the price of the security. The key point here is that information being widely disseminated to the market would make it public information, not insider information. If the information is already public, trading on it isn’t insider dealing. So the statement that information must be widely disseminated to the market is not true. The other conditions—being specific, non-public, and capable of significantly affecting the price—are consistent with insider dealing rules.