ASAP !!! please help me with my question?

[Robert Eubanks]

The fact pattern tends to suggests that the SEC will not file.

First, the trading of the stock occurred the morning after the issuance of bad news regarding JOSB. Therefore, Ellen's rant was public knowledge. Thus, no inside information.

Second, Ellen nor Ellen's partner owed no duty to the JOSB corporation. The fact pattern states that JOSB used an Ellen look alike. There is no information that Ellen was associated with the corporation in any way. So Ellen owed no duty and, therefore, was not an insider. Since Ellen was not an insider, Ellen's partner could not be found to owe a duty through the misappriation theory.

Third, Ellen's partner regularly and vigorously traded the JOSB stock over the past year, both call and put orders. So the activity by Ellen's partner was not out of the ordinary. This would be a defense to insider trading even if the trade occurred before the issuance of non-public information and Ellen and/or Ellen' partner were an insider.

Finally, the material component of insider trading is satisifed since a reasonable trader would figure a negative statement from Ellen would hurt a company that was using an Ellen look alike and marketed to the gay and cross dressing community. However, since the other elements fail, there is no insider trading and no SEC filing against Ellen or her partner.