If the MFO have access to material nonpublic information, they violated insider trading because they just acquired common shares by converting. Also, insiders are required to file Form 4 after acquiring new shares.

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Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to nonpublic information about the company.

In these cases, insiders in the United States are required to file a Form 4 with the U.S. Securities and Exchange Commission (SEC) when buying or selling shares of their own companies.

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https://en.m.wikipedia.org/wiki/Insider_trading

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They are now insiders and therefore are under trading restrictions.

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