not buying it. If you heard it, and act on it (by delaying), then you’re advocating the incentive to use material non-public info to your advantage
This is getting out of hand. People have different opinions and its been expressed. I think we need to put this topic to bed. because obviously its delayed 
I will e-mail CFA and ask them to void this question on the test, unless of course I got it right 
I put delayed. Bottom line is something caused the analyst to change his opinion and it’s not entirely clear what motivated it. So, until the research director finishes the investigation and gets to the bottom of it (at least that’s how I interpreted the case), I imagine you would have to delay publication.
No…I’m sorry to disagree but definitely publish immediately… The ros clearly States That the reports must be timely… And the original report had reasonable basis and should be reported immediatly
One vote for immediate release. A few reasoning (most covered by prior posts already): 1. Timely release of reports is one of analysts’ responsibility. The signaling effect mentioned earlier is very valid and covered in study material as well. 2. First report has reasonable basis, the second does not. The question stem worded very clearly that the supervisor saw no merit in the second report. 3. “Delaying” by itself is an action, the merger conversation is material non-public information. Delaying because of the rumor is ACTING ON MATERIAL NON_PUBLIC INFORMATION. No matter what, as an analyst, you CANNOT act on material non-public informtaion. If the merger subsequently become public, you could always issue update reports. You didn’t fail your fiduciary duty to your clients doing so. Think what if the merger collapse in the last minute(as they sometimes do)? 4. You are not misleading your clients by issuing your original report, that report contains you honest opinion at the moment you completed your report. The second report is not your honest opinion, you are misleading the clients with the second one even if they make a few extra bucks. Making up BS analysis by itself is violation of reasonable basis. 5. Unless the analyst could jsutify the change to his supervisor, which he has not done in the question stem. The report is a “go”. Take away my 86/87 license if I get this wrong.
BTW, why is this post titled “quiet period”? That’s a term from the investment banking & issuer side, no?
At a very minimum to release the original report as it was, he would have to alter it to include a pretty major new disclose that the analyst is now an insider to material non-public information. There is no way it should go out as is. What analyst would publish a report when they were recommending publishing a different report with a completely different recommendation? I don’t believe CFA guidelines would suggest such a situation. I think in this case the analyst came found himself in posession of material non-public information and from that point he was compromised. The company should prohibit the publication of the report and restrict personal share dealing of the stock amongst its staff. In my opinion that is the correct answer.