Bill Jones is the founder and lead portfolio manager of Texas Asia Partners (TAP) and Jay Park is a trader for the firm. TAP is participating in private placements[1] for both Bank of China and China Construction Bank stock, and the placement agents shared confidential information with Jones and Park about both companies. In the days prior to the private placement, Jones directed Park to make short sales[2] in each stock. TAP earned $16.2 million by using the discounted private placement shares they received to cover the short sales. Park's actions were: [1]From Investopedia: A private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than on the open market. It is an alternative to an initial public offering (IPO) for a company seeking to raise capital for expansion. [2]From Investopedia: A short sale is the sale of an asset or stock the seller does not own. It is generally a transaction in which an investor sells borrowed securities anticipation of a price decline; the seller then required to return an equal number of shares at some point in the future. a. acceptable because he was following the orders of his superior. b.acceptable because he used a short position rather than trading in the bank stock itself C. acceptable if the placement agents did not require a confidentiality agreement covering information about the private placements Od. unacceptable because the trade was based on material nonpublic information