A CFO who is a CFA Institute member is careful to make his press releases—some of them containing material and previously undisclosed information—clear and understandable to his readers. While writing a new release, he often has his current intern proofread rough drafts. He also sends electronic copies to his brother, an English teacher, to get suggestions concerning style and grammar. With respect to Standard II(A), Material Nonpublic Information, the CFO is: A) not in violation of the Standard. B) only in violation by showing the pre-release version to the intern but not to a relative such as his brother. C) violating the standard by either showing the pre-release version to his intern or sending it to his brother. D) only in violation by e-mailing the pre-release version to his brother but not the intern, because the intern is in essence an employee of the firm.
I got this one wrong before but the answer is C.
A or C is what I’d pick from.
I assume because the intern are not employees
Your answer: D was incorrect. The correct answer was C) violating the standard by either showing the pre-release version to his intern or sending it to his brother. Standard II(A), Material Nonpublic Information, says that a member must be careful about handling material non-public information. As a member of CFA Institute, the CFO must limit the people who see important information before it is released. It would not be appropriate to involve an intern or a relative in the process.
> D) only in violation by e-mailing the pre-release > version to his brother but not the intern, because > the intern is in essence an employee of the firm. this was tricky – the Code also says interns are compensated and thus employees of firms even if the interns are not paid. Thus, I thought the CFO could show it to him or her. What if the intern was replaced by his FULL TIME SECRETARY for proof reading ???
daj224 Wrote: ------------------------------------------------------- > > D) only in violation by e-mailing the > pre-release > > version to his brother but not the intern, > because > > the intern is in essence an employee of the > firm. > > > this was tricky – the Code also says interns are > compensated and thus employees of firms even if > the interns are not paid. Thus, I thought the CFO > could show it to him or her. > > What if the intern was replaced by his FULL TIME > SECRETARY for proof reading ??? Do you mean…Monica Lewinsky? 
If you come in possession of material nonpublic information, then what is the soph’s recommendation. a) Do not disclose it to anyone b) Do not cause others to act on it c) Can disclose to people who need to know this information
Consider that the aim of the standard is to not deal, encourage others to deal or disseminate material non-public information. Answer is A.
pepp Wrote: ------------------------------------------------------- > If you come in possession of material nonpublic > information, then what is the soph’s > recommendation. > > a) Do not disclose it to anyone > b) Do not cause others to act on it > c) Can disclose to people who need to know this > information A, unless it is a full time employee that needs to know this, like the CFOs secretary. They are the ones who set up the material for conference calls so literally, they will have to see it before the world at large gets it