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
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