If i a have non public material information that something negative will happen to a company. And my client wants to purchase the asset that i posses the information about. Do I have to pretend I don’t know anything bad about the company or can I tell my client not to buy the stock. Will this be misleading him? Will this be use of non material public info? Thanks - Eric
if you make the trade based on the non public info then you violate the standards II (A). i cant remember what exactly is in the codes. but i think what you should do is to inform your employer first, and i guess there is something related to putting that company into a restricted list etc. you can look that up in the text book.
If it’s an unsolicited order from a client to trade a stock you have material, non-public info on, you cannot refuse the order because doing so will ‘signal’ that you know something and therefore ‘disclose’ the information. Therefore, you must execute the trade. If you cause someone else (including clients) to act on material non-public info, then you are in violation. And of course if you act on it yourself, you are in violation.
ymmt Wrote: ------------------------------------------------------- > If it’s an unsolicited order from a client to > trade a stock you have material, non-public info > on, you cannot refuse the order because doing so > will ‘signal’ that you know something and > therefore ‘disclose’ the information. Therefore, > you must execute the trade. > > If you cause someone else (including clients) to > act on material non-public info, then you are in > violation. And of course if you act on it > yourself, you are in violation. +1