Sec
A person who receives material nonpublic information and trades on it is known as a:
Tipper = giver of inside info. Tippee = receiver who trades on it.
Complete Analysis & Legal Rationale
A tippee is someone who receives material nonpublic information from an insider (the tipper) and then trades on that information. Under securities laws, tippees can be held liable for insider trading alongside the tipper who provided the information.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Market makers provide liquidity by buying and selling securities.
A tipper is the person who provides the inside information, not receives it.
Matches the verified teaching point in the explanation.
An underwriter helps companies issue new securities.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.