Could someone explain to me why analysts can’t use information related to a tender offer to take investment actions?
Thanks!作者: giorgio10 时间: 2013-4-8 22:44
Material non public info作者: LiquidAssets10 时间: 2013-4-8 22:44
Pretty straight forward.
Can anyone explain why I cannot manipulate the to make a profit? Also, how come I cannot walk into a store with gun and take all of the money? I just don’t get it.作者: pacmandefense 时间: 2013-4-8 22:44
Maybe you don’t get it.
If you walk into a store with a gun and demand the money or you will shoot someone, you have committed armed robbery, an A felony in CT and probably every other state. It’s explicitly against the law and you go to jail for a long time.
If you hear some drunk guy talking in a bar about a tender offer and you decide that it might be legit, so you buy some call options you have done nothing illegal. You haven’t misappropriated the information and you didn’t owe any fiduciary duty to the company. If the SEC comes knocking on your door, you tell them you heard some drunk guy you never met in a bar and they will leave you alone.
That’s a pretty big difference. CFAI somehow thinks that taking advantage of someone else’s dereliction of their fiduciary duty is unethical because everyone else can’t do it. Huh?
