Imagine the following scenario: an officer of a large, publicly-traded corporation learns material, nonpublic and negative information about the health of the company. Trying to avoid massive losses on stock holdings, he or she decides to dispose of those holdings before the information in question becomes public.
Obviously, selling these holdings is not an option; such a transaction would constitute almost textbook insider trading, opening the corporate officer up to potential civil and criminal liability. But what about a donative transfer?
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