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Logic Behind Ethics Answer
This problem is in one of the Mock Tests and can't understand the logic of the correct answer:
Justin Blake, CFA, a retired portfolio manager, owns 20,000 shares of a small public company that he would like to sell because he is worried about the company's prospects. He posts messages on several internet bulletin boards. The messages read, "This stock is going up once the pending patents are released, so now is the time to buy. The stock is a buy at anything below $3. I have done some close research on these guys." According to the Standards of Practice Handbook, Blake most likely violated the Code and Standards associated with:
A. Integrity of Capital Markets, and Conflicts of Interest.
B. Integrity of Capital Markets, but not Conflicts of Interest.
C. neither Integrity of Capital Markets nor Conflicts of Interest.
Answer = B Blake violated Standard II(B) regarding the Integrity of Capital Markets by engaging in a practice that is likely to artificially inflate trading volume.
I selected A because Blake owns 20,000 shares and he is failing to disclose that on the internet.
Is there a "logical explanation" of why he is not violating the standard related to Conflicts of Interest?