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Integrity of Capital Markets

  • Material nonpublic information: Do not act or cause others to act on the material non public information.
  • Market Manipulation: Do not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.


Jain, CFA is working for a multinational auditor and during the process of auditing books of account of a publicly listed company, he comes to know that particular company is misstating its revenue. Immediately next day Jain manages to offload his personal holding in that particular company. Is Jain in violation of any of the code and standards of ethics?


The correct answer is Violated standard II(A) Material nonpublic information

Jain should not have acted upon any material nonpublic information, which gives him advantage over any other investor.


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