ACCT 2700 CORE 2026 MAIN EXAM QUESTIONS AND
ANSWERS SURE A+
✔✔What is the Consolidated Audit Trail (CAT)? (A) A database of insider Form 4 filings
(B) A comprehensive record of quotes orders and executions across US equity and
options markets (C) An internal SEC email archive (D) A blockchain clearing system -
✔✔B) A comprehensive record of quotes orders and executions across US equity and
options markets
✔✔In the Rymas declaration what initial observation triggered the LHV investigation?
(A) A whistleblower tip (B) Trading volume in a target stock far above its historical
average just before a merger announcement (C) A routine 10-K review (D) A
congressional referral - ✔✔B) Trading volume in a target stock far above its historical
average just before a merger announcement
✔✔The LHV defendants obtained non-public press releases through what means? (A)
Bribing Business Wire employees (B) Automated "spider" programs scraping the
Business Wire Connect site before public dissemination (C) Phishing emails (D)
Purchasing a Business Wire subsidiary - ✔✔B) Automated "spider" programs scraping
the Business Wire Connect site before public dissemination
✔✔In SEC v. Dorozhko the appellate court held that hacking plus trading can constitute
"deception" under securities law even without which element? (A) Material information
(B) A securities transaction (C) A breach of fiduciary duty (D) Clear intent - ✔✔C) A
breach of fiduciary duty
✔✔SEC v. Panuwat introduced what doctrine into insider trading law? (A) Classical
insider trading (B) Shadow trading (using MNPI about one's own employer to trade a
peer company's stock) (C) Misappropriation theory (D) Short-swing disgorgement -
✔✔B) Shadow trading (using MNPI about one's own employer to trade a peer
company's stock)
✔✔The Chastain (NFT/OpenSea) case's central disputed legal question was whether?
(A) NFTs are securities (B) OpenSea suffered a cognizable harm when an employee
front-ran featured NFT listings (C) Federal courts have jurisdiction over NFT trades (D)
Chastain had a valid employment contract - ✔✔B) OpenSea suffered a cognizable harm
when an employee front-ran featured NFT listings
✔✔The Wahi case extended insider trading principles to which asset class? (A)
Municipal bonds (B) Cryptocurrencies listed on Coinbase (C) Mortgage-backed
securities (D) Commodity futures - ✔✔B) Cryptocurrencies listed on Coinbase
✔✔SEC v. Blaszczak involved trading on MNPI obtained from which source? (A) A
corporate CEO (B) A government employee with advance knowledge of a Medicare
, reimbursement rate change (C) A Federal Reserve examiner (D) A stock exchange
official - ✔✔B) A government employee with advance knowledge of a Medicare
reimbursement rate change
✔✔The "make or buy" question for SEC algorithmic tools refers to what choice? (A)
Whether to prosecute or settle (B) Whether to build technical capacity in house or
procure tools from outside contractors (C) Whether to buy equity or debt (D) Whether to
use supervised or unsupervised learning - ✔✔B) Whether to build technical capacity in
house or procure tools from outside contractors
✔✔"Shrinking the haystack" describes the SEC's use of AI to do what? (A) Automate
final enforcement decisions (B) Allocate scarce investigative resources toward the most
likely violators (C) Replace Commission voting (D) Eliminate all blue sheet requests -
✔✔B) Allocate scarce investigative resources toward the most likely violators
✔✔How does Kalshi's regulatory profile differ fundamentally from Polymarket's? (A)
Kalshi is larger (B) Kalshi is US-regulated with KYC and AML while Polymarket
operates offshore with minimal KYC (C) Polymarket is US-regulated (D) They are
legally identical - ✔✔B) Kalshi is US-regulated with KYC and AML while Polymarket
operates offshore with minimal KYC
✔✔Why is insider trading enforcement much harder on Polymarket than on Kalshi? (A)
Polymarket has fewer users (B) Polymarket lacks KYC and users are effectively
pseudonymous with no mechanism to compel identification (C) Kalshi has no
enforcement power (D) Kalshi is offshore - ✔✔B) Polymarket lacks KYC and users are
effectively pseudonymous with no mechanism to compel identification
✔✔Which regulator has primary jurisdiction over Kalshi? (A) SEC (B) CFTC (C) FINRA
(D) OCC - ✔✔B) CFTC
✔✔Kalshi enjoys three layers of insider trading enforcement consisting of Kalshi itself
plus which two others? (A) SEC and DOJ (B) CFTC and DOJ (C) FINRA and SEC (D)
NYSE and NASDAQ - ✔✔B) CFTC and DOJ
✔✔One striking feature of Kalshi's announced insider trading enforcement actions is
what? (A) Massive nine-figure penalties (B) Profits and penalties are trivially small
compared to equity insider trading cases (C) All cases were referred to DOJ (D) They all
involve foreign nationals - ✔✔B) Profits and penalties are trivially small compared to
equity insider trading cases
✔✔Prediction markets have meaningfully increased which dimension of insider trading
risk? (A) Depth (the dollar size of any individual MNPI monetization) (B) Width (the
range of topics on which MNPI can be monetized) (C) Both depth and width equally (D)
Neither - ✔✔B) Width (the range of topics on which MNPI can be monetized)
ANSWERS SURE A+
✔✔What is the Consolidated Audit Trail (CAT)? (A) A database of insider Form 4 filings
(B) A comprehensive record of quotes orders and executions across US equity and
options markets (C) An internal SEC email archive (D) A blockchain clearing system -
✔✔B) A comprehensive record of quotes orders and executions across US equity and
options markets
✔✔In the Rymas declaration what initial observation triggered the LHV investigation?
(A) A whistleblower tip (B) Trading volume in a target stock far above its historical
average just before a merger announcement (C) A routine 10-K review (D) A
congressional referral - ✔✔B) Trading volume in a target stock far above its historical
average just before a merger announcement
✔✔The LHV defendants obtained non-public press releases through what means? (A)
Bribing Business Wire employees (B) Automated "spider" programs scraping the
Business Wire Connect site before public dissemination (C) Phishing emails (D)
Purchasing a Business Wire subsidiary - ✔✔B) Automated "spider" programs scraping
the Business Wire Connect site before public dissemination
✔✔In SEC v. Dorozhko the appellate court held that hacking plus trading can constitute
"deception" under securities law even without which element? (A) Material information
(B) A securities transaction (C) A breach of fiduciary duty (D) Clear intent - ✔✔C) A
breach of fiduciary duty
✔✔SEC v. Panuwat introduced what doctrine into insider trading law? (A) Classical
insider trading (B) Shadow trading (using MNPI about one's own employer to trade a
peer company's stock) (C) Misappropriation theory (D) Short-swing disgorgement -
✔✔B) Shadow trading (using MNPI about one's own employer to trade a peer
company's stock)
✔✔The Chastain (NFT/OpenSea) case's central disputed legal question was whether?
(A) NFTs are securities (B) OpenSea suffered a cognizable harm when an employee
front-ran featured NFT listings (C) Federal courts have jurisdiction over NFT trades (D)
Chastain had a valid employment contract - ✔✔B) OpenSea suffered a cognizable harm
when an employee front-ran featured NFT listings
✔✔The Wahi case extended insider trading principles to which asset class? (A)
Municipal bonds (B) Cryptocurrencies listed on Coinbase (C) Mortgage-backed
securities (D) Commodity futures - ✔✔B) Cryptocurrencies listed on Coinbase
✔✔SEC v. Blaszczak involved trading on MNPI obtained from which source? (A) A
corporate CEO (B) A government employee with advance knowledge of a Medicare
, reimbursement rate change (C) A Federal Reserve examiner (D) A stock exchange
official - ✔✔B) A government employee with advance knowledge of a Medicare
reimbursement rate change
✔✔The "make or buy" question for SEC algorithmic tools refers to what choice? (A)
Whether to prosecute or settle (B) Whether to build technical capacity in house or
procure tools from outside contractors (C) Whether to buy equity or debt (D) Whether to
use supervised or unsupervised learning - ✔✔B) Whether to build technical capacity in
house or procure tools from outside contractors
✔✔"Shrinking the haystack" describes the SEC's use of AI to do what? (A) Automate
final enforcement decisions (B) Allocate scarce investigative resources toward the most
likely violators (C) Replace Commission voting (D) Eliminate all blue sheet requests -
✔✔B) Allocate scarce investigative resources toward the most likely violators
✔✔How does Kalshi's regulatory profile differ fundamentally from Polymarket's? (A)
Kalshi is larger (B) Kalshi is US-regulated with KYC and AML while Polymarket
operates offshore with minimal KYC (C) Polymarket is US-regulated (D) They are
legally identical - ✔✔B) Kalshi is US-regulated with KYC and AML while Polymarket
operates offshore with minimal KYC
✔✔Why is insider trading enforcement much harder on Polymarket than on Kalshi? (A)
Polymarket has fewer users (B) Polymarket lacks KYC and users are effectively
pseudonymous with no mechanism to compel identification (C) Kalshi has no
enforcement power (D) Kalshi is offshore - ✔✔B) Polymarket lacks KYC and users are
effectively pseudonymous with no mechanism to compel identification
✔✔Which regulator has primary jurisdiction over Kalshi? (A) SEC (B) CFTC (C) FINRA
(D) OCC - ✔✔B) CFTC
✔✔Kalshi enjoys three layers of insider trading enforcement consisting of Kalshi itself
plus which two others? (A) SEC and DOJ (B) CFTC and DOJ (C) FINRA and SEC (D)
NYSE and NASDAQ - ✔✔B) CFTC and DOJ
✔✔One striking feature of Kalshi's announced insider trading enforcement actions is
what? (A) Massive nine-figure penalties (B) Profits and penalties are trivially small
compared to equity insider trading cases (C) All cases were referred to DOJ (D) They all
involve foreign nationals - ✔✔B) Profits and penalties are trivially small compared to
equity insider trading cases
✔✔Prediction markets have meaningfully increased which dimension of insider trading
risk? (A) Depth (the dollar size of any individual MNPI monetization) (B) Width (the
range of topics on which MNPI can be monetized) (C) Both depth and width equally (D)
Neither - ✔✔B) Width (the range of topics on which MNPI can be monetized)
