medium · CFA Level I ethics
Helion Rail's trading desk has a pending large 'Sell' order for Meridian Pack shares from a key institutional client. A trader on the desk, who also owns Meridian Pack personally, places a personal market order to sell her shares immediately. The trader argues that her trade is too small to impact the client's execution price.
Is the trader in compliance with Standard VI(B)?
- Yes, because a market order ensures immediate execution and does not interfere with the client's larger limit order.
- Yes, provided the trader discloses the personal trade to the client after the fact.
- No, because the trader failed to give the client's transaction priority.
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