Insider Information Ethical Decision-Making

Sarah is a chartered financial analyst working at a boutique investment firm specialized in equity research. During her analysis of a public tech company, she comes across material nonpublic information regarding a significant product launch that will greatly impact the company’s stock. The information was disclosed to her through a conversation with a former colleague who is now working in the company's investor relations department. Sarah is excited about the potential for profitability and considers using this information to make trades on behalf of her clients. However, she is aware of the ethical implications of trading on nonpublic information.

Facing this dilemma, Sarah must decide her course of action while adhering to the CFA Institute’s ethical guidelines.