QUESTION 39

1. Lydia Ty, CFA, an equity analyst of a brokerage firm, was sitting next to the in-house legal counsel of Penguin Corporation on a flight from China to New York. While the legal counsel was working on a document on his laptop computer, Ty noticed that the document was related to a major lawsuit against Penguin by the Chinese government. As soon as Ty arrived in New York, she conducted a thorough analysis on the impact of the lawsuit on Penguin and found that it could potentially shut down all of Penguins operations in China. She then issued a sell recommendation on the Penguin stock. Which of the following statements is most accurate?

	a.	Ty did not violate Standard II (A) Material Nonpublic Information since her act was allowed under mosaic theory.
	b.	Ty did not violate Standard II (A) because she did not personally benefit from the information.
	c.	Ty violated Standard II (A) because she used material nonpublic information.