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6. Tracy Chapman works as a proctor for the administration of the CFA examination in her city. She reviews a copy of the Level III exam on the evening prior to the exam and discloses information to two candidates who use it to prepare for the exam. Chapman and the two candidates have least likely violated the CFA Institute Standards of Professional Conduct, related to:
Conduct that compromises the integrity, validity or security of CFA Institute programs.
Suitability.
Attempt to circumvent security measures established by the CFA Institute.
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7. Christina Lucci, a CFA candidate, who is a portfolio manager of a growth mutual fund, maintains an account in her sister‟s name at several brokerage firms with which her fund‟s clients also do business. Whenever an eagerly awaited equity IPO is announced, she instructs the brokers to buy it for her sister‟s account. Because such issues are scarce, her clients are unable to receive any new shares. Lucci most likely violates the CFA Institute Standards of Professional Conduct related to:
Priority of Transactions.
Disclosure of Conflicts.
Additional Compensation Arrangements
8. Stefan Ericsson, a CFA candidate is an analyst working for publicly traded companies to electronically promote their stocks. He has also set up a website to market his research capabilities as an independent analyst. Ericsson posts a buy recommendation on his website for each company that he has a contractual relationship with and fails to disclose this in the research reports he issues or statements in the internet chat rooms. Ericsson least likely violated the CFA Standards of Professional Conduct related to:
Misrepresentation.
Fair Dealing.
9. Brendon Frazer, a CFA candidate, is an analyst with ITI, an investment and brokerage company. ITI requires him to give a recommendation and research report every month on a different company. He is also enrolled in a university where he takes night classes to earn an MBA. Frazer has informed his employer of his enrollment in the university. Due to excessive workload he finds it difficult to complete his research report on a technology company on time. In order to save time he develops his report based on a few articles he read recently about the company and gives his „buy‟ recommendation. Frazer gives the reference of the articles in his report. Is Frazer‟s report and recommendation in compliance with the CFA Institute Standards of Practice?
No.
Yes, because he gives the reference of the articles.
Yes, because the technology company is suitable for some clients of ITI.
10. Nancy Keene recently left Kay Investments to join another competing firm. She left her former employer after 10 years without any non- compete agreement, and did not solicit any of her clients during the transition period. After joining the new firm, she wants to contact her former clients because she developed close ties with them after earning strong returns for their portfolios. Keene knows that many will follow her to the new employer. Is Keene in violation of CFA Institute Standards of Professional Conduct?
Yes, because she cannot contact her former clients.
No, because she does not use any material from her former employer.
Yes, because of loyalty to her former employer.
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