Question #36
Reading: Reading 42.2 Standards of Professional Conduct Guidance for Standards II
PDF File: Reading 42.2 Standards of Professional Conduct Guidance for Standards II.pdf
Page: 20
Status: Incorrect
Correct Answer: B
Your Answer: B
Question
Regarding non-public information, which one of the following statements is NOT correct?
Answer Choices:
A. A member can be summarily suspended for having received material non-public information
B. An analyst may use some types of non-public information
C. Disclosing material non-public information would have an impact on the price of a security or be of interest to a reasonable investor
Explanation
All of these are true except that a member can be suspended for having received material
non-public information. The member can receive such information as part of their regular
duties or by accident. Neither is punishable in and of itself, and penalties only apply if the
member trades or causes others to trade on the information. The member may have
certain duties, such as trying to disseminate the information after receiving it. An analyst
may use nonmaterial non-public information.
(Module 42.3, LOS 42: II(A))