Abra, a vice-president at Mahogany, Inc., recently revealed - quite inadvertently - information about the tender offer f

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Abra, a vice-president at Mahogany, Inc., recently revealed - quite inadvertently - information about the tender offer from Mahogany to Kadabra, his friend who works for a rival firm. Kadabra, in turn, shared this information with his trading buddy, Cosmo. Cosmo immediately recognized that in light of this information, he was better off not participating in the offer. He went ahead and shorted the stock of Mahogany and reaped a tidy profit of about a hundred thousand dollars in a month's time when Mahogany tanked. In this case:I. Cosmo can be held liable for insider trading under SEC Section 10(b) and Rule 10b-5.II. Cosmo can be held liable for insider trading under the Misappropriation Theory.III. Cosmo can be held liable for insider trading under SEC Rule 14e-3 which prohibits insider trading based on information about tender offers.IV. Kadabra has breached his fiduciary duty toward Mahogany.

A. I, II, III & IV.
B. I only.
C. none of these answers.
D. III only. E. I & IV only. F. IV only. G. II & III. H. II only.