Answer-first summary for fast verification
Answer: No
## Explanation Maybolk's actions **did not violate the Standards** (Option A). ### Key Points: - **Standard II(A): Material Nonpublic Information** prohibits trading while in possession of material nonpublic information - **Market-making exception**: Market makers are permitted to continue trading while in possession of MNPI to fulfill their market-making obligations - **Contra side trading**: By instructing subordinates to only take the contra side of unsolicited customer trades, Maybolk is appropriately limiting the firm's trading activity - **Regulatory framework**: Market makers have special exemptions to continue providing liquidity even when possessing MNPI Maybolk's actions demonstrate proper compliance with the market-making exception under Standard II(A).
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Petra Maybolk, CFA, works for a large investment firm where she oversees a team of market makers. Maybolk's firm has just taken a small issuer public and is a market maker in the issuer's stock. After receiving material nonpublic information about the small issuer, Maybolk instructs her subordinates to continue market-making activities for the small issuer and to take only the contra side of unsolicited customer trades in the stock.
Did Maybolk's actions violate the Standards?
A
No
B
Yes, because Maybolk instructs her subordinates to continue market-making activities for the small issuer
C
Yes, because Maybolk instructs her firm's market maker to only take the contra side of unsolicited customer trades in the small issuer's stock
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