Whistleblowing on Insider Trading

Very Hard Ethical Decision-making Investment Analysis

Maria is a senior analyst at a large investment firm, and she has recently discovered that two of her colleagues have been using inside information to influence their investment decisions in a private equity fund they manage. Maria is aware of the ethical implications of this behavior; however, she struggles with the dilemma of whether to report her colleagues to the compliance department or to confront them privately first. Maria recalls the CFA Institute's Code of Ethics while contemplating her options.

The firm has a well-defined whistleblower policy that protects employees who report unethical behavior, and Maria is aware that according to the Code, she is obligated to act in a manner that upholds the integrity of the markets. Nonetheless, she is also concerned about the potential personal fallout from taking action against her colleagues.

How should Maria proceed in relation to influencing positions in the private equity fund while balancing her ethical obligations and potential professional repercussions?

Confront her colleagues privately and urge them to cease their actions before reporting them.

Report her colleagues to the compliance department immediately, citing the insider information usage.

Gather more evidence on their actions before deciding whether to confront or report them.

Hint

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% Correct62%