What action should an employee take if they come into possession of MNPI?

An employee who comes into possession of material nonpublic information (MNPI) has a responsibility to maintain the integrity of the market and adhere to legal and regulatory standards. Placing the issuer on a restricted trading list is the appropriate action in this situation. This action helps to prevent any trades that could be deemed insider trading, thus protecting both the employee and the firm from potential legal repercussions.

By putting the issuer on a restricted trading list, the employee ensures that no one within the firm can trade on this sensitive information until it becomes public. This demonstrates a commitment to compliance with securities laws and the ethical standards expected in the financial industry.

Notifying the issuer or trading on the information would not only violate securities regulations but could also lead to severe penalties for both the individual and the firm. Sharing the information with colleagues also breaches confidentiality and could result in unintentional dissemination of MNPI, leading to insider trading concerns. Therefore, maintaining strict protocols through a restricted trading list is crucial for compliance and ethical conduct.