Company TGS conducted an aerial geo-physical survey of eastern Canada for more than 15,000 square miles. There was a concentration of commercially exploited minerals which was indicated because of the operation. A hole was drilled by TGS to yield the core with an exceedingly high content of minerals. The result of the survey was not made public. The employees purchased the stock of TGS after knowing about the samples. The price of stock TGS rose, after the survey report was published in the newspaper. SEC filed a case against the organization’s employees for insider trading. The employees claimed that the information on the basis of which they traded is not a material. To explain: The liability of company, if enough ore was not found after drilling of the area.

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Chapter 28, Problem 2CT

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Case summary: Company TGS conducted an aerial geo-physical survey of eastern Canada for more than 15,000 square miles. There was a concentration of commercially exploited minerals which was indicated because of the operation. A hole was drilled by TGS to yield the core with an exceedingly high content of minerals. The result of the survey was not made public. The employees purchased the stock of TGS after knowing about the samples. The price of stock TGS rose, after the survey report was published in the newspaper. SEC filed a case against the organization’s employees for insider trading. The employees claimed that the information on the basis of which they traded is not a material.

To explain: The liability of company, if enough ore was not found after drilling of the area.

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