7. David Gain was the CEO of Forrest Media Corp., which became interested in acquiring RS Communications, Inc. To initiate negotiations, Gain met with RS’s CEO, Gill Raz, on Friday, July 12. Two days later, Gain phoned his brother Mark, who bought 3,800 shares of RS stock on the following Monday. Mark discussed the deal with their father Jordan, who bought 20,000 RS shares on Thursday. On July 25, a day before the RS bid was due, Gain phoned his parents’ home, and Mark bought another 3,200 shares. The same routine was followed over the next few days, with Gain periodically phoning Mark or Jordan, both of whom continued to buy RS shares. Forrest’s bid was refused, but on August 5, RS announced its merger with another company. The price of RS stock rose 30%, increasing the value of Mark’s and Jordan’s shares by $664,024 and $412,875 respectively. Did Gain engage in insider trading? What is required to impose sanctions for this offense? Can a court hold Gain liable? Why or why not?