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Over the past two days, Lorraine Quigley, FRM, manager of a hedge fund, has been purchasing large quantities of Craeger Industrial Products’ common stock while at the same time shorting put options on the same stock. Quigley did not notify her clients of the trades although they are aware of the fund’s general strategy to generate returns.
Which of the following statements is most likely correct? Quigley
A
Did not violate the Code.
B
Violated the Code by manipulating the prices of publicly traded securities.
C
Violated the Code by failing to disclose the transactions to clients before they occurred.
D
Violated the Code by failing to establish a reasonable and adequate basis before making the trades.