Huang is the CEO and an executive director of GLB Group, a d…
Huang is the CEO and an executive director of GLB Group, a diversified company engaged in the business of securities investment and finance. The company’s shares have been listed on the Stock Exchange of Hong Kong (SEHK) for the past two decades. Huang circulates the unaudited financial statements for the past fiscal year to the company’s board of directors. The financial statements show a substantial increase in profitability over the previous fiscal year. Shortly after Huang provides this information to the board of directors, dramatic movements are seen in the trading volume and price of GLB stock. Relying on his obligation under the CFA Institute Code of Ethics and Standards of Professional Conduct to keep employer information confidential, act with diligence, and have a reasonable and adequate basis for investment actions, Huang decides to wait for the audited financial statements to be prepared before releasing the statements publicly. Three weeks later, after the audited financial statements are ready, GLB issues a profit alert that states GLB expects a sharp turnaround of its results for the year, mainly attributable to the substantial net gains of its investments. Following publication of the profit alert, the share price of the company jumps 24%. Huang’s actions are