Mark Spencer manages portfolios for several corporate pension plans. While discussing investments with one of the plan sponsors he learns that the company is going to split itself into two divisions and spinoff one to the stockholders. Analysts have been recommending this action for almost two years and the stock price is expected to rebound by up to 15%, and perhaps more. Mark is already fully invested in the company's stock and cannot add more to his plans. While on his way home that evening, he meets an old acquaintance on the subway and the subject turns to street values. During one of the stops, Mark lets it slip that Carefree fashions is going to split itself into two divisions and spinoff one to shareholders. Brian makes a mental note and before getting off at the next station he thanks Mark and hopes they could someday drink some coffee after work together. The next morning Brian calls his broker the first thing and places a market order to buy 2,500 shares of Carefree Fashions. Brian

Explanation: Bryan has violated the standard on prohibition against trading on material non-public information because even though he does not have a fiduciary obligation to Carefree Fashions, he knows that Mark has breached confidentiality and fiduciary duty, and the information should not be traded upon.