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Basic Question 5 of 5
Oscar is a research analyst covering the mining industry. Along with other analysts, Oscar visits the primary mine of Gold Rush Mines (GR). During the visit, a major piece of equipment fails and Lewis overhears an unidentified employee state that production will be stalled for six months. Oscar immediately files a "sell" recommendation on GR without any additional research. Has Oscar violated any CFA Institute Standards?
B. Yes, with respect to Material Nonpublic Information.
C. No
A. Yes, with respect to Diligence and Reasonable Basis.
B. Yes, with respect to Material Nonpublic Information.
C. No
User Contributed Comments 4
| User | Comment |
|---|---|
| Salim6 | Why not B ? |
| SalimBouch | it is not true information, it cannot be material |
| stevo | Surely this is material non-public information and lack of diligence |
| xefor | It is unknown without further information if this would be material non-public information. If the employee's claims are false and misrepresenting the situation then it would not be material. However what someone said is not a reasonable or adequate basis and thus a contravention of the Standard V(A). |
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Learning Outcome Statements
demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct
identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards
CFA® 2025 Level I Curriculum, Volume 6, Module 3.