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Ethical and Professional Standards Q89

0. Babar Ahmed is a trader at Cooper & Baines, a local brokerage firm. He trades frequently in the stock of Zelle, despite the fact that Zelle is not on the recommended list of securities of Cooper. Ann Miller is the supervisor and compliance officer of Ahmad. Part of her compensation is based on the trading revenues of Cooper. She notices the large volume of trade of Zelle, but does not investigate it. Has Miller violated the CFA Institute Standards?

  • Option : C
  • Explanation : Yes Miller violates Standard IV (C) Responsibilities of Supervisors, by not investigating the purchase of the stock and her failure to supervise the trader’s activities
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