amqata

This is a fine example of CFAI ethics being irrelevant. Powers sister must be a high mucky-muck to have this information and there is only one reason for her to be breaking her fiduciary duty to the company by disclosing earnings numbers early - she wants to help Powers break the law. So Powers has been approached with a solicitation to commit securities fraud and given all the illegally obtained info he needs to do it and Powers first thought is...would CFAI approve?!

Here's a harder question than the one asked - Powers sister calls him and gives him disappointing earnings numbers. The next day, his 70-year old buddy Jones who dabbles in stock options calls him up and says he wants to buy a boatload of puts on Potter Steel because he has "a bad feeling". If Powers doesn't execute the trade (according to above reasoning) he has violated CFAI's policy. If Powers does execute the trade, and the SEC decides that this is unusual activity it will take them 5 minutes to figure out that Powers sister is the CFO of Potter and that Powers likely tipped off Jones. Powers will be in compliance with CFAI but facing serious legal trouble including the prospect of real jail time.

Powers needs to rat out his sister and ask the company to disclose earnings numbers. His sister is jeopardizing his career and more and CFAI's ethics just no longer apply when the stakes are this high (having a PCP inquiry and going to jail are just way different).