Taken from the CFAI on-line practic questions: [question removed by moderator]
In this question, Omar is the CFO. What do they mean by “clients”? And what would be the case to give “priority to the company”?
Thanks!
I see what you mean.
Don’t know whether it’s still applicable in this case but allow me to remind myself first that priority of transaction should always follow this order :
> Clients should retain the right to trade first ;
> then Employer ; and
> Finally Employees
I don’t know the specs of the above question but I assume that the stocks underlying the ESOP have to be disclosed first and they might be subsequently ceded to third parties? He gives full disclosure to potential clients and ultimately the chance to react first? Sorry If I didn’t help
He may be the cfo, but the companies processing desk should process the companies client business before his
What I got hug up on was the “one week prior” to IPO. Can they allocate the trade before it takes place? Isn’t it front running?
What I mean is that if you’re the CFO of Facebook, who are you supposed to give priority when you want to sell your shares? Which clients? Facebook users? Other shareholders maybe?
I don’t see the point, honestly.