An officer of a company has been invited by a large mutual fund company to give a talk to the fund company's analysts about its business plans and prospects. At the talk, the officer inadvertently discloses material information that could affect the stock's price. Which statements are TRUE?

I A public announcement of the news must be made within 24 hours
II A public announcement of the news must be made within 10 business days
III The company must file an 8K with the SEC disclosing the information to avoid insider trading liability
IV The company must file a 10K with the SEC disclosing the information to avoid insider trading liability
A I or III
B I or IV
C II or III
D II or IV

A public announcement of the news must be made within 24 hours and the company must file an 8K with the SEC disclosing the information to avoid insider trading liability

Explanation: The company has to publicise the disclosed information immediately, before the end of that business day, to avoid the public from seeing the board of directors as people who are using the privilege knowledge their have about the company to make their own personal gain.

It is an important information that relates an irregular corporate event, so an 8-k repot should be published, in accordance to the Securities and Exchange Commission (SEC), so as to inform the shareholders and investors.

Because this information has been made public by an internal officer without a proper plan of it, the company is liable to the information, and should make it public in a formal way.