Conflicts of Interest and Research Objectivity

Hard Research Objectivity Standards Personal Investments

As a research analyst at an investment firm, you are required to adhere to strict ethical guidelines to maintain research objectivity. Recently, you noticed that your personal investment in XYZ Company has been performing exceptionally well. One day, a colleague approaches you with sensitive information about an upcoming merger involving XYZ Company. You are uncertain about how to proceed given your personal stake in the company.

According to the CFA Institute's Research Objectivity standards, which of the following actions should you take to uphold your ethical responsibilities?

Immediately sell your shares in XYZ Company and disclose the receipt of confidential information to your compliance officer.

Maintain your investment in XYZ Company but exclude any commentary on the company in your research reports.

Ignore the confidential information since it was not obtained through official channels and continue reporting on XYZ Company as usual.

Hint

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