While at dinner a member overhears a well-known and influential analyst from a different firm tell his companion that he will be raising his recommendation on Tree Products from hold to buy when he appears on a morning talk show the next day. Before the broadcast, the member buys 1,000 shares of Tree Products for her own account. The member has violated the Standard relating to:

A change in investment recommendation by a well-known and influential analyst is likely to affect the market price and is considered material information, so acting on this information before it has been released is prohibited by Standard 11(A) Material Nonpublic Information. Because the member does not work for the analysts firm, this is not addressed by Standard III(B) Fair Dealing. Having a reasonable basis does not apply to a members own personal trades.