Edo Ronde, CFA, an analyst for a hedge fund, One World Investments, is attending a key industryconference for the microelectronics industry. At lunch in a restaurant adjacent to the conference venue, Ronde sits next to a table of conference attendees and is able to read their nametags. Ronderealizes the group includes the president of a publicly traded company in the microelectronics industry, Fulda Manufacturing, a company Ronde follows. Ronde overhears the president complainabout a production delay problem Fulda's factories are experiencing. The president mentions thatthe delay will reduce Fulda's earnings by more than 20% during the next year if not solved. Ronderelays this information to the portfolio manager he reports to at One World explaining that in a recent research report he recommended Fulda as a buy. The manager asks Ronde to write up a negativereport on Fulda so the fund can sell the stock. According to the CFA Institute Standards of Professional Conduct, Ronde should least likely:
Ronde should refuse to follow his supervisor's request. If Ronde revises his research report based on the information he overheard at the industry conference, he would violate Standard II(A): Material Nonpublic Information. The production delay information is material and considered nonpublic until it is widely distributed. Therefore, it should not be included in Ronde's research report or acted on until it becomes public C Ronde should try to encourage Fulda to make the information public.