When is possession of non-public material corporate info I know it is appropriate to request that the company make the info public. If they refuse can the info be acted upon? I am fairly certain that the answer is NO but the correct answer for a Schweser question in book6-exam2-PM states that it is ok to make the trade in this case. What makes it confusing is that the explanation states…“If public dissemination is not made, he is not allowed to act on the information.”
under the mosaic theory it is appropriate to use non-public information that is not material by itself, but when combined with public information you have gathered in your research it becomes material. Using this information would be considered acceptable
Agree with CFALondon… but if the information is material by itself, you cannot trade on it.
jackoliver Wrote: ------------------------------------------------------- > When is possession of non-public material > corporate info I know it is appropriate to request > that the company make the info public. If they > refuse can the info be acted upon? > > I am fairly certain that the answer is NO but the > correct answer for a Schweser question in > book6-exam2-PM states that it is ok to make the > trade in this case. What makes it confusing is > that the explanation states…“If public > dissemination is not made, he is not allowed to > act on the information.” You’ve misunderstood. In the question the trader with MNPI had been asked to buy a stock he knew was rubbish. The answer was that he should get the company to release the MNPI, but if they refuse, he should place the buy, because if he didn’t (or told his supervisor etc) he’d have been acting on MNPI. You can never act on MNPI (unless you get it by mosaic theory)
Chrismaths - tyvm; that clarifies it for me.