Wiley Mock Ethics question: For L2ET-ITEMSET-AS02-ME0001-1503 and L2ET-ITEMSET-AS01-ME0061-1511

This one is driving me nuts and I emailed Wiley about it on May 12th with not response. All pertinent info is below. I imagine this type of question could be on the exam…

L2ET-ITEMSET-AS02-ME0001-1503 Question #1

Teresa Goodwin, CFA, is an analyst at Everest Financial, a company that provides research and investment management services. One Saturday evening, Goodwin meets her friend, Joanna Charles, CFA, for dinner. Charles is an analyst at Quality Investments, and she tells Goodwin that a friend who is an employee at Alpha Corp. has told her that Alpha’s next year’s profits will be extremely disappointing. Charles tells Goodwin that she has already issued a sell recommendation on the stock. Goodwin goes home and based on independent, unbiased research, she releases a sell recommendation on the stock the following week.

Answer: Only Charles and her friend have violated Standard II (A): Material, Non‐Public Information. However, Goodwin has not violated any standard as she conducted her own independent research and came up with an investment recommendation.

I selected the answer where Goodwin was ok, because she did her own independent research and I got it right. Compare the above to below:

L2ET-ITEMSET-AS01-ME0061-1511 Question #6

Later that day, one of Smithers’s clients informs her that he heard Replica Pharmaceuticals is about to receive a takeover from a much larger pharmaceutical company. When asked how he knows this, he confides that Replica Pharmaceuticals’ chief executive officer told him of the pending offer at dinner. Smithers quickly, but thoroughly, researchers Replica Pharmaceuticals and determines that its shares are attractive at their current price. She is now considering whether she should buy the shares for some or all of her client accounts.

Answer: If Smithers buys shares of Replica for her/clients she will be violating the code and Standards because she possesses material nonpublic information and she must not act or cause others to act on the information.

I boil it down to this - in both cases, someone was told something material, they independently researched it to verify it, but whether they act on it violates the standards is different. Why is it ok in the first question but not in the second?

I’ve also been having a problem with Wiley replying to me about answers that appear to be wrong. If I happen to hear anything, I’ll also ask about these.