medium · CFA Level I ethics
A research analyst at Vesper Foods is preparing a downgrade for Helion Rail from 'Buy' to 'Sell.' While the report is in the final compliance review, the analyst sells his personal holdings of Helion Rail to lock in the current price. He justifies this by stating that he is not 'acting on' the report but merely 'rebalancing' his portfolio. This is:
- Permissible if the analyst has already disclosed his personal holdings in the fine print of previous reports.
- Permissible if the 'rebalancing' was part of a pre-set automated trading plan.
- A violation of Standard VI(B) because he is front-running a pending recommendation change.
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