Ethical and Professional Standards Q126

126The Food Safety and Standards Authority of India (FSSAI) was investigating the presence of dangerous substances in a popular baby cereal, manufactured by Selet Limited. Selet is a publicly listed company with operations around the world. The tests results showed the presence of harmful chemicals above permissible limits that could mean product recalls and a temporary ban on production. The results of the test have not made public as yet. Tara, a lead scientist at one of Selet‟s labs, confides the results to Raul, a research analyst who covers Selet and manages Tara‟s portfolio. She asks him to sell her holdings in Selet. If Raul acts on Tara‟s information only for her portfolio, he would most likely violate which of the following Standards?

Option : B
Explanation : Raul must not act on the information passed by Tara and must encourage her and her firm to achieve public dissemination. Refer to Standard II(A) Material Nonpublic Information.

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