I wonder if the below scenario causes inside trading, and does it break CFA ethics?
One works in a company, through a cc'd internal email of managment, he learnt from corporate development that another company is "conducting a process to sell" and management were discussing whether it is good to acquire. But at last the management didn't want to acquire that company and he knew it.
But the person did some research and found out that the company has some market differentiation and maybe another company could acquire it since it is conducting a process to sell, it must reach out to other potential buyers.
So he acquired the company stocks and after several weeks, the target got acquired and he profited.
Does this fit into mosaic theory?
Any thoughts?
Edited 1 time(s). Last edit at Monday, November 29, 2010 at 10:55PM by Irishgyy.
One works in a company, through a cc'd internal email of managment, he learnt from corporate development that another company is "conducting a process to sell" and management were discussing whether it is good to acquire. But at last the management didn't want to acquire that company and he knew it.
But the person did some research and found out that the company has some market differentiation and maybe another company could acquire it since it is conducting a process to sell, it must reach out to other potential buyers.
So he acquired the company stocks and after several weeks, the target got acquired and he profited.
Does this fit into mosaic theory?
Any thoughts?
Edited 1 time(s). Last edit at Monday, November 29, 2010 at 10:55PM by Irishgyy.