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A financial advisor has heard from a relative of nr industries inc.'s ceo that the company is planning to shut down its operations in europe next year. the financial advisor realizes that this decision may cause a decline in the value of the company's shares and decides to sell them off. a buyer, unaware of the company's future plans, sees this as a potential opportunity and invests in the company. what does this scenario best illustrate?

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MrCreighton

This would be a case of insider trading, meaning that the trader (the financial advisor) has information that is not public that will affect the future performance of the company. If the advisor acts on this early information and profits, then this could be considered illegal.

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