标题: The Folly Of Material Non-Public Info [打印本页] 作者: Jupiter 时间: 2011-7-13 16:32 标题: The Folly Of Material Non-Public Info
How in the hell would the housekeeper know that the conversation was about a tender offer?!? She merely saw them talking, didnt hear anything, and even if she did, she is NO way a credible source.... What do you guys think??
A stockbroker who is a member of CFA Institute has a part-time housekeeper who also works for the CEO of Festival, Inc. One day the housekeeper mentions to the broker that she saw the CEO of Festival having a conversation at his home with John Tater, who is a nationally known corporate lawyer and consultant. The stockbroker is restricted from trading on this information:
A) if the housekeeper says the meeting concerned a tender offer and the broker knows that it is non-public information.
B) for both of the reasons listed here.
C) only if the broker knows that the meeting is non-public information.
Your answer: C was incorrect. The correct answer was A) if the housekeeper says the meeting concerned a tender offer and the broker knows that it is non-public information.
Standard II(A), Material Nonpublic Information, states “a member cannot trade or cause others to trade in a security while the member possesses material nonpublic information” A tender offer would certainly be material nonpublic information. Knowing that the meeting took place, and nothing else, does not restrict the broker. A reasonable investor would need to know more to determine if the information was material.作者: Flok 时间: 2011-7-13 16:32
some of the questions here seem to be the reasons no one has ever gotten 100% on this test.
I would have said B, especially since answer A contains answer C.
If she says she saw them together(heard nothing) and then the broker looks through the news for clues and analyzes the financials discovering that there could be a tender offer coming...is that mosaic theory, or tainted because the first meeting was in private?
