Commercial Law, 2019 Bar — Question B.15-b

ESSAY

Mr. P, the president of JKL, Inc. whose shares are listed in the Philippine Stock Exchange, was notified that the corporation has just been awarded a P5,000,000,000.00 construction contract by a reputable private company. Before this information could be disclosed to the public, Mr. P called his stockbroker to purchase 20,000 shares of JKL, Inc. He also mentioned the transaction to his brother, Mr. B. Mr. B, who was not involved at all in the business of JKL, Inc., also bought 50,000 shares of JKL, Inc. because of the tip disclosed to him by Mr. P. (b) Should Mr. P and Mr. B be held liable for insider trading? Explain.

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