what’s the answer to your question ‘map1’ I say (B)
Nope. Not B:)
Alan Ward is an analyst who follows Winkle Corp. During recent discussions with management, he heard comments by several people that seemed strange at the time but were not significant enough to follow up on. When the comments were subsequently combined with analysis of public information, however, Ward came to the conclusion that a takeover bid for Winkle was imminent. Which one of the following statements is true? (a) The comments are not material nonpublic information. (b) By combination with the public information, the comments have become material nonpublic information. © Ward must report whoever made the comments to those persons’ superiors. (d) Ward must urge Winkle to publicly disclose the takeover bid. Based on the above my answer would be (A). CP
CP, and that would be right on the money. The comments are nonmaterial, and even if the analysts discovers something material, later on, the comments remain nonmaterial. So the answer is (A).
They’re non-material because they were not based on anything? It was what ‘he heard’ and was not based on diligence and research? im confused…please explain. thnks.
The comments are not material nonpublic because “seemed strange at the time but were not significant enough to follow up on”.
oooooooooooo so “not significant enough” made it not material! ah -ha
I thnik we must also pay attention to the “heard form several people”. Who are those ppl. maybe the source is not credible in this case.
Let’s try one more:) Jack Trainer hears on the radio that Nihon Corporation, a Japanese firm, has delivered a tender offer to American Broadcasting that would result in acquiring 127 media properties, many of which are in markets where the company already owns media firms. Trainer also overhears the senator from his state and an aid talking quietly over dinner at a local restaurant about his intention to introduce legislation preventing foreign companies from owning more than one media firm in each market. Trainer estimates that the Nihon Corp. offer for American Broadcasting would be 20 percent over market value if the duplicate media properties must be sold. With regard to the prohibition against using material nonpublic information under the Code and Standards, Trainer has: a)Not violated the Code and Standards. b)Violated the Code and Standards based on information he gained in overhearing the Senator and his aid. Trainer had information from the radio news story that made the Senator’s comment more valuable. c)Violated the Code and Standards based on information in the radio news story alone. Trainer had information from the Senator’s comment to his aid that made the news story more valuable. d)Violated the Code and Standards due to his specialized knowledge that he used to tie together both the radio news story and the Senator’s comment to his aid.
Map1, I think the answer is “a” not violated the Code and Standards. The information heard on the radio is public information, so “c” is wrong. “d” is the heart of th mosiac theory and does not violate the C&S. “b” is a viable option, but the comments are are about a proposal that may or may not ever be passed into law. Therefore, there is no violation.
a) he has not acted on the info
phew! glad my answer is similar to the above 2…i would have said ‘A’ also because he did not issue out the report of his verdict. The radio was a public matter.
What he overhears the senator saying is nonmaterial (because by itself the information has no impact) nonpublic (because it was a private conversation that he overheard), it does gain importance when considered together with the radio public announcement but the analyst is not violating anything. It has nothing to do with the analyst issuing a report or acting on the information, the problem is not saying if he issued a report or acted in the market. It only says that he thinks the offer would be “20 percent over market value if the duplicate media properties must be sold”. The correct answer is A.