I.

INTRODUCTION

In a company that is into a line of business having a little room for sustained growth, it much search routes to diversify for the sake of
continued development and also to increase the wealth of its shareholders and also for the purpose of increasing its influence to people and further
expansion. One of these companies is the Anheuser-Busch Company. A-B is a brewing organization and its first endeavor in 1982 led to the internal
development of Eagle brand snack foods. A-B is also considering acquisitions such as Campbell Taggart, the second largest in terms of market
share in the bakery industry. However, this acquisition sprouted branches of issues, particularly in language of confidentiality. Its former director,
Paul Thayer was alleged to have leakage the information regarding the imminent acquisition of Campbell Taggart. It is said that Mr. Thayer’s friends
had then purchased shares of Campbell Taggart in the open market.

Mr. Suhre, the Vice President and General Counsel of St. Loius-based Anheuser-Busch Company, had learned about the details of inside
trading in January 1984. In this regards, Mr. Suhre is facing a sticky decision whether to file a suit against Mr. Thayer and some other party or not
considering the fact that if the case was pursue, it would cost million of dollars as legal expenses, there is no assurance of winning, and A-B had no
way to gauge how the rest of corporate America would react. However, Mr. Suhre felt that A-B had a corporate responsibility to initiate action against
Paul Thayer. He was worried that if A-B management did not sue, shareholders might file a derivative action suit in opposition to Mr. Thayer and
some other party.

This study wishes to determine the grounds of whether Anheuser-Busch Company must file a case against Mr. Paul Thayer and
friends, to offer actions that will help the company protect itself from insider trading and market inefficiency, and to know the adverse effects of inside
trading to individual investors.

II. EXECUTIVE SUMMARY

Insider trading is said to occur when an individual with special knowledge of a corporation uses this knowledge to buy and/or sell securities such
as stocks and bonds to make a profit. This special knowledge is known as material information and includes any pertinent knowledge about a
company that is not known to the general public.

Corporate insiders are defined as a company's officers, directors and any beneficial owners of more than ten percent of a class of the company's
equity securities. Trades made by these types of insiders in the company's own stock, based on material non-public information, are considered to be
fraudulent since the insiders are violating the fiduciary duty that they owe to the shareholders. The corporate insider, simply by accepting
employment, has undertaken a legal obligation to the shareholders to put the shareholders' interests before their own, in matters related to the
corporation. When the insider buys or sells based upon company owned information, he is violating his obligation to the shareholders.

Every company or business usually starts out with its own set agenda, which differs from business to business. A lot of businesses exist simply
to make money. There are others who seriously wish to provide a needed service to a community or to the world. Each of these businesses has a
corporate responsibility to the public, its shareholders and the world it trades in.

In its most basic terms, corporate responsibility can come down to the ethics of a business. Each company has its own set of core values, but
the company’s values also touch everyone that the business deals with.

III. HISTORY

Anheuser-Busch was founded in 1852 as the Bavarian Brewery in St. Louis by George Schneider, who sold the brewery eight years later to
Eberhard Anheuser. Anheuser's son-in-law, Adolphus Busch, joined the company in 1865, eventually becoming a partner and president of the
company. In 1876, Busch helped restaurateur Carl Conrad create Budweiser beer—rights to the name Budweiser had been purchased from another
brewery. In 1896, they created the Michelob brand.

When Adolphus died in 1913, his son August took over the company, which was re-named Anheuser-Busch, Inc. in 1919. Anheuser-Busch
has grown from its roots as a regional beer company into the largest international brewer/marketer and a leading operator of theme parks. During
prohibition, when it could not sell beer, the company nearly went under, but survived by selling other products such as ice cream, ginger ale, malt
syrup, and nonalcoholic Budweiser. Once Prohibition was repealed, in the 1930s the firm began a steady ascent toward the top of the beer business.
By 1957, Anheuser-Busch surpassed Schlitz in sales to become the largest U.S. brewer, a title it has held ever since. Busch Entertainment Corp., a
theme park operator, was created in 1959 with the opening of Busch Gardens in Tampa, Florida. In 1982, Anheuser-Busch bought Campbell Taggart,
a baked goods maker, and also created its Eagle snack foods unit. Both were sold off in 1996, taking the company out of the food business. That
same year the company also sold the St. Louis Cardinals, an earlier acquisition. In 1989, Anheuser-Busch acquired Sea World from Harcourt Brace
Jovanovich, adding Anheuser-Busch to the ranks of the country's largest theme park operators. The company established an international division in
1981, but major growth in international sales did not begin until the mid-1990s. One observer noted that Anheuser-Busch's international efforts "were
going nowhere" until the company gave up efforts to set up its own overseas operations and began establishing partnerships with foreign brewers in
the early 1990s. After that, results were more promising. For example, Anheuser-Busch's international volume grew 13.4 percent in 1997, to 7 million
barrels. However, this was still a small total compared with its U.S. sales of 89.6 million barrels. In 1997, Anheuser-Busch had an 8-percent share of
the worldwide beer market Anheuser-Busch planned to grow internationally through a complex web of joint marketing agreements, local brewing,
import distribution agreements, joint ventures, contract brewing, and equity investments. In 1997 sales outside the U.S. market increased by 13
percent. The company also planned to build Budweiser as a global brand, focusing on marketing the beer in countries with rising growth rates and
standards of living. Sales of Budweiser overseas increased by 18 percent in 1997, mostly in China, the United Kingdom, Ireland, and South America.

The company’s principal subsidiary, the U.S. industry leader since 1957 and a leader across the world. Produces more than 100 beers, flavored
alcohol and nonalcohol beverages at 12 breweries in the United States.

IV. POINT OF VIEW

WILLIAM SUHRE

Vice-president and general counsel of St. Louis-based Anhueser-Busch Company

V. TIME CONTEXT

1982-1985

VI. STATEMENT OF THE PROBLEM

1. Should William Suhre present his recommendations to the Anheuser-Busch Company senior management about the insider trading
suit case filed by the Securities and Exchange Commission against Mr. Paul Thayer, a former director of the company?

2. How should Anheuser-Busch Company react upon learning the inside trading of information? What are the factors to be considered in
making decisions regarding filing a suit case against Mr. Paul Thayer and other tippees?

3. How can the company protect itself from inside trading of information?

4. How does trading of information erode confidence in capital markets?

VII. OBJECTIVES

a. To determine whether Anheuser-Busch Company must file a case against Mr. Paul Thayer and friends.

b. To offer actions that will help the company protect itself from insider trading and market inefficiency.

c. To know the adverse effects of inside trading to individual investors.

VIII. AREAS OF CONSIDERATION

STRENGTHS
 enhanced shareholders wealth
 socially responsible
 good stock performance

WEAKNESSES

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  weak performance of brewery in restaurants and supermarkets.

OPPORTUNITIES
 Diversification
 to grow internationally through a complex web of joint marketing agreements, local brewing, import distribution agreements, joint
ventures, contract brewing, and equity investments

THREAT
 social and regulatory pressure over its marketing tactics, particularly television advertising

IX. ANALYSIS

By 1982, Anhueser-Busch Company acquired Campbell Taggart Inc. through a friendly takeover to benefit the company of establishing
distribution networks at restaurants and supermarkets, where the brewer had been weak. The acquisition requires payment of premium ranging from
20% to 40% over the target’s premerger stock price. The premium is defined as the percentage increase that the final negotiated offer price
represents over the target stock price one month before the merger announcement.

Trading by corporate insiders and their tippees is analyzed in Anheuser-Busch's 1982 tender offer for Campbell Taggart. Court records that
identify insider transactions are used to disentangle the individual insider trades from liquidity trades. Consistent with previous studies, insider trading
was found to have had a significant impact on the price of Campbell Taggart. However, the impact of informed trading on the market is complicated.
Trading volume net of insider purchases rose. Contrary to the broad implications of adverse selection models, Campbell Taggart's liquidity improved
when the insiders were active in the market, and the insiders received superior execution for their orders.

EXHIBIT 1 STOCK DATA Selected Daily Stock Data. June1 – September 1, 1982

It shows in the data above that, insider’s trading significantly affect the volatility of the price of A-B Company from the month of June (price range: 48-
51); July (price range: 51-54); August, which is the public announcement, on the first two (2) weeks (price range: 49 - 50 ).

As can be observed, a month before Anheuser-Busch announces its interest over Campbell Taggart Inc., acquiring company’s stock prices
dramatically increased which implies that there are lots of purchasing activities in its target company before the public announcement. And two weeks
after the public notice, there was a considerable decline in stock prices which entails that there is a bulk selling of shares of Campbell Taggart.

Evidently, there was a leakage of information before the public announcement {August 2, 1982} of the merger between Anheuser-Busch
Company and Campbell Taggart Inc. This matter was learned by William Suhre, the general counsel of Anheuser-Busch Company, as SEC filed a
civil complaint against Paul Thayer and his eight friends, namely: Billy Bob Harris, William Mathis, Sandra Ryno, Julie Williams and four other friends.

Permitting this insider trading would create incentives for insiders to produce positive information in order to be the first to benefit from it.
Insider transactions occurred during the month of July 1982 moved stock prices in the right direction, that is, market efficiency increases, because
insider trading adjusts stock prices in the right direction, as seen below. The stock prices of Campbell went up drastically, which was probably due to
insider trading.

EXHIBIT 2

Anhueser-Busch: Price and Volume

3
EXHIBIT 3
Campbell Taggart: Price and Volume

4
 Moreover, the insider trading happened in Campbell Taggart forced the stock to its true value, since there was a circulation of information.
Due to the purchases made by Thayer and his friends before the information is known to public, it seemed that Anheuser-Busch probably paid more
to acquire its target. Few days before August 2, 1982, the insiders traded almost half of the total volume of shares. This disclosure of nonpublic
material information was in violation of rule 14(e)-3 of Securities and Exchange Act {see appendix}. A keen investor must be curious and question the
trading activities on Campbell.

The table below shows the selected purchases and sales of Campbell Taggart Inc. stock by insiders for the month of June 1982. If we sum
up the number of shares traded, a total of 102,200 shares were traded by the insiders compared to the total shares traded by all investors which was
about 749,300 shares. Therefore, nearly 14% was attributed to the leakage of information resulting to large purchases made by the insiders before
the public announcement of the merger.

EXHIBIT 4
Selected purchases and sales of Campbell Taggart Inc. Stock by insiders for the month of June 1982

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EXHIBIT 5

Closing price {Campbell Taggart Inc.}

July 1, 1982 <one month prior to public announcement> = $ 27.000

August 2, 1982 <public announcement > = $ 29.625

$ 2.625 difference

X 15,000,000 shares bought

Attributed to insider trading $ 39,375,000.00

============

As to the price per share shown above, the target company’s stock price increased by 9.72 % or $ 2.63 per share. Since the Anheuser-
Busch purchased 15 million shares, about $ 40 million was the difference, an amount which was material to the company to incur losses.

INTEGRITY OF CAPITAL MARKETS

Trading on material nonpublic material information erodes confidence in capital markets, institutions, and investment professionals by
supporting the idea that those with inside information and special access take unfair advantage of the general investing public. Although trading on
inside information may lead to short term profits, in the long run, individuals and the profession as a whole will suffer as investors avoid capital
markets perceived to be in rigged in favor of the knowledgeable insider.

When is Information Material?

Information is material if its disclosure would likely have an impact on the price of a security or if reasonable investors would want to know
the information before making an investmen decision.

The specificity of the information, the extent of its difference from the public information, its nature, and its reliability are key factors in
determining whether a particular piece of information fits the definition of material. Material information may include information about mergers,
acquisitions, and tender offers.

When is Information Nonpublic?

Information is nonpublic until it has been dissmeminated or is available to the marketplace in general. Dissemination can be defined as
“made known to”.

Considering the above data, we can appropriately say that the inside trading of information about the takeover plans over Campbell
Company Inc. is a nonpublic material information.

EFFECTS OF INSIDE TRADING TO CAPITAL MARKET AND THE COMPANY

The capital market fulfils two functions. First, "it provides companies with capital and investors with shares." Second, it channels funds to the
most desirable, mostprofitable uses.

Effects on the marketplace:

{a} Informational
{b}Allocational
{c}Operational Efficiency

Informational Allocation

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 Informational efficiency describes "the use of available information to assess securities and securities prices." An understanding of the
effect of insider trading on market efficiency requires a brief look at the basic market theory called the Efficient Capital Market Hypothesis. The
Efficient Capital Market Hypothesis states that stock prices reflect the value of the underlying shares based on all public information about the stock.
There are three different categories of the Efficient Capital Market Hypothesis. These three different categories are the weak form, the strong form
and the semistrong form of the Efficient Capital Market Hypothesis:

i. The Weak Form:

The weak form of the Efficient Capital Market Hypothesis assumes that "prices fully reflect all information contained in the historical pattern
of market prices." Therefore, no investor can predict future prices by looking at the past development of prices. The weak form implies that prices
follow a random walk. Consequently, no advantage arises from studying past prices. The weak form of the Efficient Market Theory is irrelevant in the
context of insider trading, because insiders base investment decisions on material nonpublic information and not on pricing patterns.

ii. The Strong Form:

The strong form of the Efficient Capital Market Hypothesis states that securities prices reflect both nonpublic and public information. While
nonpublic information is only available to corporate insiders, public information is all information, which is generally available to investors through
disclosures, formal or informal. Assuming the strong form of the Efficient Market Theory applies, an investor derives no advantages from insider
trading, since the information is already incorporated in the price of the stock. If it could be shown that securities prices reflect publicly and nonpublicly
available information, benefiting from insider trading would not be possible. "However, the results of strong form tests generally show that corporate
insiders and stock exchange specialists benefit because of informational advantages."

iii. The Semistrong Form:

The semistrong form of the Efficient Capital Market Hypothesis holds that security prices reflect only publicly available information. Because
publicly available information is already reflected in the prices, an analysis based on public available information cannot lead to above-average
returns. Traders receive above-average returns only when they trade on the basis of nonpublic information. The semistrong form implies that
investors with nonpublic information are more capable of estimating the true value of a security. Therefore, they earn excess returns when trading on
the basis of nonpublic information. The semistrong form of the Efficient Capital Market Hypothesis is the most widely accepted as applicable to
current world markets.

EFFICIENT CAPITAL MARKET

There are three basic assumptions we must consider in an efficient market:

1. Large number of profit maximizing participants analyze securities.

2. New information about securities comes in a random fashion
3. Profit-maximizing nvestors adjst security prices reaidly to reflect the effects of the new information.

In an efficient capital market, public announcement or disclosure of material information will always influence the stock price immediately.
According to the semistrong form of the Efficient Capital Market Hypothesis, stock prices do not incorporate "information that is not publicly available,
e.g., inside information about the issuer, or the unexpected possibility that a specific takeover may be made in the future." As a consequence, insiders
may profit from investing based on their information.

Because insider trading adjusts stock prices in the right direction as mentioned a while ago, the investor would pay a more accurate and
lower price for the security than they would without insider trading, and the free market will produce results which conform with broader social
objectives. It can be also argued that insider trading benefits society. Insider trading smoothes changes in stock prices, and thereby decreases
volatility. Therefore, it leads to an increased attractiveness of the securities market, especially for risk-averse investors.

The underlying notion is that insider trading provides the market with information. Those who trade with insiders sell at higher prices in the
case of good news or purchase at lower prices in the case of bad news. Since not all information is reflected in a form communicable to the market,
insider trading supposedly fulfils a communicative function. An increase in trading volume caused by insider trading could signal to the market that
there is undisclosed information which is not being reflected in the price. We therefore classify the insider trading on Campbell Taggart as semi-strong
form of Efficient Market Hypothesis.

COST-BENEFIT ANALYSIS

Even if restrictions on insider trading were considered desirable, their sound implementation is extremely expensive. A wide variety of
individuals can be classed as insiders by virtue of possessing information material to securities prices -- top management, upstream and downstream
producers, regulatory and enforcement authorities, professional advisors, etc. Further, the universe of associates through whom insiders could route
their trades is very large -- family, friends, business associates who are "paid" in information, etc. Even if there are pockets of high quality
enforcement, they would not appear fair in an environment where insider trading is otherwise rampant. Even in the US, where significant resources
have been expended on deterring insider trading, there is anecdotal evidence that a great deal of successful speculation continues based on insider
trading.

The company must be able to estimate the amount of damage done to the A-B Company. The tippees profited by purchasing shares of
stock of the target company and sold the same shares when public accouncement made share prices rise. Security and Exhange Commission stated
that the insiders made illegal profits of over $1.9 million from the information that Mr. Thayer supplied.

{computation}

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CURRENT MARKET STRATEGY

Anheuser-Busch Companies summed up its corporate strategy with four key phrases, focusing on the core businesses of beer,
entertainment, and packaging; leveraging resources; thinking differently; and "making friends." The company planned to leverage its resources in
increasing its quality standards, expanding internationally, and creating new "specialty" beers. They also used aggressive marketing to capitalize on
core brands. One of the most successful campaigns was Budweiser Concentration Week, the largest selling promotion in Anheuser-Busch's history,
in which employees and wholesalers "hit the streets" selling Budweiser.

"Thinking differently" applied to improving relationships with wholesalers and re-engineering internal management systems. And "making
friends" referred to the promotion of the safe use of alcoholic beverages, increasing the company's charitable activities, and promoting environmental
conservation. Another corporate strategy focused on reducing costs, improving productivity, and changing the company's pricing strategies in order to
increase the profit margin, rather than increasing price.

Anheuser-Busch’s market strength was reflected in its stock performance, which remained good despite a traditionally low dividend yield.
Management believed this performance was due to the company’s successful growth-based strategy which stock analysts appreciated and
rewarded with consistent “buy” recommendations.

X. RECOMMENDATION

With regard to the evaluation and analysis that we have made, we recommend the following:

• William Suhre must recommend to Anheuser-Busch Company to file a suit case against Paul Thayer and his friends who participated in the
insider trading of Campbell Taggart. Through this action, there will be a security in the public confidence of the company in capital market
which will be weakened by insider trading because if investors fear that insiders will regularly profit at their expense, they will not be nearly
as willing to invest. The intuition of investors and their feeling for justice and fairness should not be underestimated. If investors feel unfairly
treated they may lose confidence in the integrity of the securities market. These investors would then withdraw from the market and invest in
other opportunities. This view clarifies why concern about the confidence of investors in the integrity of the market was a motive for the
enactment of the insider trading prohibition.

• A-B Company must allocate its management resources efficiently on matters involving costly legal battles. They must conduct investigations
regarding the estimated damages attached with the insider trading. The company must deduct damage to public relations and good will,
appropriate percentage for taxes, and any amount uncollectible. Corporate responsibility plays an important part of the matter.

• The company should make reasonable efforts to achieve public dissemination of information. We encourage firms to develop and follow
disclosure policies designed to ensure that information is disseminated to the marketplace in an equitable manner.

• As regards with the filing of suit against Thayer, A-B company must cooperate with the legal investigation of the Securities and Exchange
Commission. Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 give the SEC the authority to seek a court order requiring
violators to give back their trading profits. The SEC can also ask the court to impose a penalty of up to three times the profit the violators
realized from their insider trading.

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XI. PLAN OF ACTION

A lawsuit shall be filed against the insiders, Paul Thayer and the other tippees whom he associated with the material nonpublic
information.

An information barrier commonly referred to as a “firewall” is the most widely approach to preventing the communication of material
nonpublic information within the firms. It restricts the flow of confidential information to those who need to know the information to perform their
jobs effectively. Elements of the system may include, but not limited to:

• Substantial control of relevant interdepartmental communication in either the compliance or legal department.

9
 • Review of employee trading though maintenance of “watch”, “restricted”, and “rumor” lists.

• Documentation of the procedures designed to limit the flow of information between departments and companies and of the
enforcement actions taken pursuant to those procedures.

The company must also monitor and review its performance-based compensation plans of top managers. The theory underlying insider
trading as compensation asserts that the manager benefits from the change in the stock price since he buys or sells before the trading public has
received knowledge.

Finally, A-B Comapany may maintain an ethical culture within the company by building or improving its ethics and compliance program. An
effective company can:

• Establish a code of conduct that reduces risk of criminal behavior

• Detect wrongdoing, foster quick investigations, minimize consequences
• Demonstrate company’s ethical/legal philosophy during an investigation
• Enhance company reputation and stature

APPENDICES

General Rules and Regulations

promulgated
under the
Securities Exchange Act of 1934

Rule 10b5-1 -- Trading "on the Basis of" Material Nonpublic Information in Insider Trading Cases

Preliminary Note to Rule 10b5-1: This provision defines when a purchase or sale constitutes trading "on the basis of" material nonpublic information
in insider trading cases brought under Section 10(b) of the Act and Rule 10b-5 thereunder. The law of insider trading is otherwise defined by judicial
opinions construing Rule 10b-5, and Rule 10b5-1 does not modify the scope of insider trading law in any other respect.

a. General. The "manipulative and deceptive devices" prohibited by Section 10(b) of the Act and Rule 10b-5 thereunder include, among other
things, the purchase or sale of a security of any issuer, on the basis of material nonpublic information about that security or issuer, in breach
of a duty of trust or confidence that is owed directly, indirectly, or derivatively, to the issuer of that security or the shareholders of that issuer,
or to any other person who is the source of the material nonpublic information.

b. Definition of "on the basis of." Subject to the affirmative defenses in paragraph (c) of this section, a purchase or sale of a security of an
issuer is "on the basis of" material nonpublic information about that security or issuer if the person making the purchase or sale was aware
of the material nonpublic information when the person made the purchase or sale.

c. Affirmative defenses.

1.
i. Subject to paragraph (c)(1)(ii) of this section, a person's purchase or sale is not "on the basis of" material nonpublic
information if the person making the purchase or sale demonstrates that:

A. Before becoming aware of the information, the person had:

1. Entered into a binding contract to purchase or sell the security,

2. Instructed another person to purchase or sell the security for the instructing person's account, or

3. Adopted a written plan for trading securities;

B. The contract, instruction, or plan described in paragraph (c)(1)(i)(A) of this Section:

1. Specified the amount of securities to be purchased or sold and the price at which and the date on
which the securities were to be purchased or sold;

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 2. Included a written formula or algorithm, or computer program, for determining the amount of
securities to be purchased or sold and the price at which and the date on which the securities were to
be purchased or sold; or

3. Did not permit the person to exercise any subsequent influence over how, when, or whether to effect
purchases or sales; provided, in addition, that any other person who, pursuant to the contract,
instruction, or plan, did exercise such influence must not have been aware of the material nonpublic
information when doing so; and

C. The purchase or sale that occurred was pursuant to the contract, instruction, or plan. A purchase or sale is not
"pursuant to a contract, instruction, or plan" if, among other things, the person who entered into the contract,
instruction, or plan altered or deviated from the contract, instruction, or plan to purchase or sell securities
(whether by changing the amount, price, or timing of the purchase or sale), or entered into or altered a
corresponding or hedging transaction or position with respect to those securities.

ii. Paragraph (c)(1)(i) of this section is applicable only when the contract, instruction, or plan to purchase or sell securities
was given or entered into in good faith and not as part of a plan or scheme to evade the prohibitions of this section.

iii. This paragraph (c)(1)(iii) defines certain terms as used in paragraph (c) of this Section.

A. Amount. "Amount" means either a specified number of shares or other securities or a specified dollar value of
securities.

B. Price. "Price" means the market price on a particular date or a limit price, or a particular dollar price.

C. Date. "Date" means, in the case of a market order, the specific day of the year on which the order is to be
executed (or as soon thereafter as is practicable under ordinary principles of best execution). "Date" means, in
the case of a limit order, a day of the year on which the limit order is in force.

2. A person other than a natural person also may demonstrate that a purchase or sale of securities is not "on the basis of" material
nonpublic information if the person demonstrates that:

i. The individual making the investment decision on behalf of the person to purchase or sell the securities was not aware of
the information; and

ii. The person had implemented reasonable policies and procedures, taking into consideration the nature of the person's
business, to ensure that individuals making investment decisions would not violate the laws prohibiting trading on the
basis of material nonpublic information. These policies and procedures may include those that restrict any purchase,
sale, and causing any purchase or sale of any security as to which the person has material nonpublic information, or
those that prevent such individuals from becoming aware of such information.

General Rules and Regulations

promulgated
under the
Securities Exchange Act of 1934

11
Rule 10b5-2 -- Duties of Trust or Confidence in Misappropriation Insider Trading Cases

Preliminary Note to § 240.10b5-2: This section provides a non-exclusive definition of circumstances in which a person has a duty of trust or
confidence for purposes of the "misappropriation" theory of insider trading under Section 10(b) of the Act and Rule 10b-5. The law of insider trading is
otherwise defined by judicial opinions construing Rule 10b-5, and Rule 10b5-2 does not modify the scope of insider trading law in any other respect.

a. Scope of Rule. This section shall apply to any violation of Section 10(b) of the Act and Rule 10b-5 thereunder that is based on the purchase
or sale of securities on the basis of, or the communication of, material nonpublic information misappropriated in breach of a duty of trust or
confidence.

b. Enumerated "duties of trust or confidence." For purposes of this section, a "duty of trust or confidence" exists in the following circumstances,
among others:

1. Whenever a person agrees to maintain information in confidence;

2. Whenever the person communicating the material nonpublic information and the person to whom it is communicated have a
history, pattern, or practice of sharing confidences, such that the recipient of the information knows or reasonably should know that
the person communicating the material nonpublic information expects that the recipient will maintain its confidentiality; or

3. Whenever a person receives or obtains material nonpublic information from his or her spouse, parent, child, or sibling; provided,
however, that the person receiving or obtaining the information may demonstrate that no duty of trust or confidence existed with
respect to the information, by establishing that he or she neither knew nor reasonably should have known that the person who was
the source of the information expected that the person would keep the information confidential, because of the parties' history,
pattern, or practice of sharing and maintaining confidences, and because there was no agreement or understanding to maintain
the confidentiality of the information.

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