Hello,
Please do kindly take a look at the below questions pertaining to CMFAS M1B examination, if you are M1B qualified or going to sit for the papers like me, your contribution will be very, very much appreciated.
1. 2 Licensees, ABC and EFG Co Ltd. EFG is interested to purchase 1000 XXX shares, and ABC happen to have sufficient XXX shares in their own account. What can ABC do?(A) Sell 1000 shares to EFG. (B) Disclose to EFG that the shares belong to ABC (C) Sell 500 shares to EFG (D) Cannot sell anything to EFG
2. ABC Company, a Licensee, has come into contact with news that QQ Company is facing financial difficulties, and the announcement of news on 10 January will certainly bring the shares of QQ Company crashing down. Now, Mr Peter, a customer of ABC, requested them to buy in 100,000 shares of QQ on 6 January. ABC revealed to Mr Peter about the bad news, but Mr Peter insisted on buying. ABC then discloses then it will act as principal and sell Mr Peter the shares as they have 10 lots in their account. If ABC Company is charged of insider trading, they (A) Have a valid defence (B) Liable to compensate Mr Peter (C) Is guilty of insider trading (D) None of the above.
3. Mr John, CEO of Burger Co, has entered into an agreement to buy over Ketchup Store, a subsidary of Hotdog Corp. The agreement will be announced on 10 January. As the buyover was to ease the debts of Hotdog Corp, news will crash the shares of Hotdog. Due to internal procedures and standards, Mr John was barred from communicating this to anyone, thus he was unable to do so. Mr Jerry, another executive director of Burger Co, sold 10,000 shares of Hotdog Corp on 8 January. Who is guilty of insider trading? (A) Burger Co (B) Mr John (C) Mr Jerry (D) None of the above.
4. Patrick, a licensed representative, received instructions from his wife, Gail, to purchase XYZ shares at $1.80 at 9 a.m. At 9.30 a.m, Patrick received instructions from his customer, Gen, to purchase XYZ shares at $1.78. As Patrick was unable to match Gail's order, he withdrew them and entered Gen's orders. Can Patrick still key in Gail's orders after that? (A) Yes, since her bid price is higher (B) Yes, since her order was before Gen (C) No, her order cannot be keyed in anymore
5. Patrick, a licensed representative, received orders from Mrs ABC to purchase 5,000 shares of QQ Company. 30 minutes later, he received orders from Mr ABC, husband of Mrs ABC, to sell off 5,000 shares of QQ Company. Mr and Mrs ABC are trading from their own individual accounts, and appeared to have no mutual knowledge about one another's actions and intentions. Can Patrick put through the trade?
My apologies for a somewhat lengthy post, but I would be very grateful if anyone could shed some light on the above questions.
Thanks!