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Answer#1 SAURABH SAXENA

1) The first instance in the movie where 10b-5 rule was violated is when Bud fox gives confidential information about FAA’s ruling in favor of Bluestar airlines. He received this information through his father. According to the tipper/tippee theory of insider trading, any insider who passes confidential information to a third party for some personal gain is violating 10b 5 rule. Similarly the recipient of this confidential information is liable for trading if he knows that the information is confidential, information is coming from a fiduciary and the insider expected some personal gain. Bud Fox passed confidential information to Gekko expecting monetary benefits in return which makes him a tipper. Gekko on the other hand knew he received confidential information from an insider who had fiduciary duty towards his father (under misappropriation theory) and wanted monetary gains from him. Still Gekko decided to invest in that confidential information which makes him a tippee.

2) According to misappropriation theory, misappropriating information is to obtain information by improper means or converting the information to your own benefit. When Bud fox disguises himself as a maintenance worker to enter Roger Barne’s Uncle’s office and finds insider information about Rorker electronics to pass on to Gekko, he violates misappropriation theory of Insider Trading because he gets the insider information through improper means. In the same incidence, Fox then passes this insider information to Gekko for his personal gains and acts as a tipper.

3) At the end of the movie, Bud Fox secretly plans with Wildman and makes him agree to buy Bluestar. With this insider information he buys and sells stock of Bluestar affecting the price of the stock. He eventually gets Gekko to sell all stock of Bluestar and informs Wildman so that he can buy...