Insider Information and Market Manipulation Violation

Medium Cfa Institute Code And Standards Integrity - Market Manipulation

John is a financial analyst at a large investment firm. He has recently received non-public information regarding a potential acquisition of a public company. To gain an advantage, John decides to recommend the stock to his close friends before the announcement is made, believing that this would not constitute market manipulation since they are personal acquaintances.

Which of the following actions by John represents a violation of the CFA Institute Code and Standards regarding integrity and market manipulation?

John can legally share non-public information with his friends since they are not professional investors.

John's recommendation is acceptable as long as he does not directly trade on the information himself.

John's actions constitute a violation because sharing non-public information is a form of market manipulation.

Hint

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