last ethics in AM its, remember, material, provides

islandgyrl

i vaguely remember this but it was about the leverage buyout of a retail company…
a friend from another company provides the analyst with EXTENSIVE financial data and says they WILL ANNOUNCE THE DEAL NEXT WEEK …analyst rejects it and thinks its overpriced….then client calls to ask about the same retail company analyst says sell short its overpriced…
which violation is it?
i said material nonpublic info
wat do u think?

bchadwick

Material Non Public Info…

transferpricing

Yea it’s def a violation of Diligence and reasonable basis because he received the info from a second party and did not diligently verify the info himself.

AndyNZ

I think i put that he did violate MNPI but not due diligence and care (what is the proper term?) This is because I remembered a question in Schweser that i got wrong for which the answer was that the analyst did violate MNPI because they gave an opnion but could not back it up and support it with evidence. hmm maybe it wasn’t MNPI….

hw0799

@milos
But knowledge of the deal and her opinion that it would fail led her to analyze it to begin with hence I went the same route as woollycat.

mik82

What about that part “After careful analysis of available data he concluded that the stock is overpriced…” (or some similar wording)… the decision on whether the stock was over/underpriced has nothing to do with leveraged buyout.
Milos

BC_MBA_student

myself and another got the same answer.