In the context of material nonpublic information, what is a violation when a CFO shares a pre-release document with an intern?

Sharing material nonpublic information, such as a pre-release document, constitutes a violation of the standard because it involves disclosing sensitive information that has not been made available to the public. The role of a CFO is pivotal in ensuring that such information is kept confidential and shared only with individuals who are authorized and have a legitimate business need to know.

In this scenario, disclosing the pre-release document to an intern is problematic. Interns, typically being outside the group of individuals who handle sensitive information on a regular basis, may not have the necessary training to understand and handle such information appropriately. This sharing can lead to the risk of insider trading or the spread of sensitive information, which could have serious implications for the company's reputation and compliance with securities regulations.

The violation exists regardless of the medium through which the information is shared, meaning that the method of communication (e.g., email, verbal, etc.) is not the determining factor in whether a violation has occurred. Additionally, the violation is not limited to sharing with individuals outside the firm; sharing with any unauthorized individual, including employees like an intern, still constitutes a breach of ethical standards. Thus, sharing nonpublic information, regardless of the recipient's status, is a serious violation.