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Old 11-27-2007, 10:12 AM
stinkypete stinkypete is offline
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Join Date: Jul 2004
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Default Re: Is This Insider Trading?


Im doing CFA level 3 and i believe the CFA answers would be yes, yes, yes as well.

For anyone whose interested, the cfa definition is to the best of my memory "if you ACT with the intention of profit with the use of MATERIAL, NON PUBLIC information" its bad.

In all these cases, the information is surely both material and non public.

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If the CFA program says that, then I believe it isn't trying to teach you what the law is, it's trying to guide you to ethical behavior. The actual law is very murky on what is illegal and prosecutors/SEC like it that way. This whole discussion is partly driven by the ambiguity of insider trading laws.

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yeah you hit the hammer on the head there. CFA rules are in nearly all circumstances more extreme than the law.

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the CFA ethics section always has "reasonable" answer options that are more "extreme" than the correct answer. #3 is a great example of the type of question where the "common sense" answer - where you think it's pretty clear what the "ethical" thing to do would be - is not correct.

#2 isn't clear enough because sklansky wasn't clear about what he actually heard, but given the way its worded there isn't necessarily any material information there.
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