Ethics Q "Loyalty / material nonpublic information"

From Schweser Qbank: Michael Malone, CFA, is an investment analyst for a large brokerage firm in New York who covers the airlines industry. After hours in his personal time, Malone maintains an online blog on which he expresses his personal opinions about various investment opportunities, including, but not limited to, the airlines industry. On his blog, he posts a very negative investment opinion about WestAir stock. Malone knows that WestAir’s stock will be downgraded to a “sell” by his firm next week. Malone has: A) violated Standard IV(A) Loyalty by divulging confidential information that is the intellectual property of his employer. B) violated Standard II(A) Material Nonpublic Information by releasing material that could negatively impact the price of the security. C) violated Standard VI(B) Priority of Transactions by releasing material information to the public before releasing to the firm’s clients. Your answer:The correct answer was B). Malone is in violation of Standard II(A) because the information is both material and nonpublic. He is in violation whether or not he divulges the impending downgrade by his firm on his blog, because he is using nonpublic information. A “sell” opinion on a security issued by a large brokerage firm will almost certainly impact the stock’s price. /// I just wonder why choice A is not the right answer?

the stk has not been officially downgraded yet so not sure the intellectual property for that recommendation exists.

I also think its a ‘most relevant’ type of question, as standard A still applies at some point. Ultimately, standard II(A) will have a generally greater affect than standard IV(A). That’s just me trying to rationalize the answer…any thoughts?