SIE (Securities Industry Essentials) Practice Exam

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Under which of the following circumstances is an employee of a public company allowed to trade upon information without breaching insider trading laws?

After overhearing it in a company meeting
From a confidential company email
An independent securities analyst's explanation
By decoding encrypted company data

The correct answer is: An independent securities analyst's explanation

An employee of a public company is only allowed to trade upon information if it is from an independent securities analyst's explanation. The other options (overhearing it in a company meeting, from a confidential company email, or decoding encrypted company data) all involve obtaining the information directly from the company, which would be considered insider trading and therefore illegal. Only information obtained from a third-party source, such as an independent securities analyst, would not violate insider trading laws.