Explanation:
According to CFA Institute Standard II(A): Material Nonpublic Information, when members and candidates possess material nonpublic information, they must not act or cause others to act on the information.
In this scenario:
The most appropriate action is to encourage the company to disseminate the information publicly to ensure fair disclosure to all market participants.
No comments yet.
Sam Patterson, CFA, hosts a conference call about the auto industry on behalf of his investment firm. The call is held for a small number of clients. Aditya Rao, the CFO of L2 Motors (L2M), an electric car manufacturer, is a featured guest. In response to a question during the call, Rao mentions a recent major advance in L2M's battery technology not previously disclosed to the public. Patterson determines the information is material.
According to the Standards, Patterson should:
A
encourage L2M to disseminate information about the new technology to the public.
B
promptly issue a press release on behalf of his firm to make the information about the new technology publicly available.
C
immediately have conference attendees sign a nondisclosure agreement to preserve confidentiality of the information.