Ethics - urge to make the information public or put the security on a restricted list

Swissfox

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Hi,
I am struggling between two options for question regarding ethics:
Question: The analyst XY, CFA, has just taken a job as trader for the company LOL. One of his first assignments is to execute the purchase of a block of MDR Industries.
While working with MDR on an assignment for his previous employer, he learned that MDR sales have weakened and will likely be significantly below the LOL analyst’s estimate, but no public annoucement of this has been made. Which of the following actions would be the most appropriate for the analyst XY to take according to the Standards?
A contact MDR management and urge them to make the information public and make the trade if they refuse
B Request that the firm place East Street’s stock on a restricted list and decline to make any trades of the company’s stock
C Post the information about the drop in sales on an internet bulletin board to achieve public dissemination and inform his supervisor of the posting.
I chose answer B, correct answer is A. So, it’s pretty obvious that the answer C is wrong. Now I’m struggling between A and B. I understand why it’s A, but I’m not convinced… with the sentence “urge them to make the information public and make the trade if they refuse” I had the feeling that it was kind of a “blackmail”, which is the reason why I chose the answer B.
Could someone explain me the difference between A and B?
Much appreciated
 
Lol swissfox, this is the second time when that’s exactly what I thought and chose. What I understood from the answer explaination is that requesting to place the stock on a restricted list will be like taking an action based on material non public informataion. If you did not have the information you would not requested the firm to place the stock on the list. I personally do not find this explaination convincing, hopefully someone will help us out.
 
ok, this is a better explanation..
Option B is not correct because on a normal day, assuming Analyst XY did not work with MDR, he would not have the knowledge of weakened sale, and he will on a normal day carry out the trade as requested, because there is no indication in the public indicating otherwise or justifying not making the trade.
So, if he places the stock on a restricted list, Analyst XY will be acting on Material Non-public, and thus a violation of the codes and standard.
Option C, obviously wrong..
Option A is correct, i also got it wrong at first glance, but after reading very carefully, i reasoned through it..
The best course of action is for Analyst XY to trade the asset as requested (That is what he will do assuming he is not in possession of the fallen sales information). So he will trade the asset. So, asking MDR to publish the information prior to taking the trade is an effort from him to ensure public dissemination of the information, but in the event that MDR failed to publish the information, then Analyst XY just have to trade the asset as requested.
Thant is the way i see it.
Hope that helps a little.
 
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