Any general rule that people are trying to go by to answer this question on the ethics section? When analyst accepts a gift and doesn’t disclose, it’s an obvious violation because he didn’t disclose. But if he accepts a gift and discloses, under what circumstances is it still a violation even if he discloses? I believe that ethics book had an example where analyst accepted airfare and hotel and tickets to something for a company he would later write a research report on, and this was a violation even though he disclosed because it made him impartial.
I think he’s “required” to disclose but can accept as long as he reports it although it is not recommended that he accept. Also, if the gift value is nomimal, i.e. a Mcdonalds Happy Meal, he does not have to disclose it. Someone please correct me.
agree with you that disclouse not necessary if its nominal. dont totally agreee that if he just reports it thats ok. cuz there are def some examples where you report it but its still not ok (disclousre doesnt free you of partiality)
Gifts from clients - Disclosure - No violation (Per no favoritism to this client among other clients) Supersized extra value meal - no disclosure - token gifts under $100 do not need disclosure Gifts from those you do business with - synonymous with soft dollars - should not be accepted if the benefit does not go to the client. (Gifts from those you do business with are usually tainted)
what if you are going to write a research report in X company in order to determine if theyre a buy sell or hold, and they pay for your airfare and hotel to go out and see the company. you disclose. violation or no?
if the treatment you received wasnt lavish, and could not be seen to affect your ind/objectivity then its nolt a violation. if they are putting you up at the ritz and there was cheaper accom available it goes beyond a purely business trip. the CFAi will clearly distinguish in a question id like to think as this is a very grey area and one we all struggle with!
CFAI always suggests paying your own way. But, one is not in violation to take travel expenses in modesty.
Case 1: Accept modestly and along with other anaysts; but you write a report Case 2: Reject (best case) Case 3: Accept travel etc + golf + ski stuff; write a report I think what you are referring to case 1) is the report you published recieved a criticism from the investing comm. that you were with the CEO of the academy. I think CFAI’s point here is “look, you now have to justify this. So try to avoid this” but did not say this violated the standard. Correct me if I am wrong.
2 is recommended, 1 is looked poorly upon but allowed, 3 is no good
I was thrown off when I got a practice question wrong because I answered that it was ok for an analyst to accept a DESK CLOCK as a gift without disclosure. It wasn’t. Must’ve been one terrific desk clock…
where was the quesgion? cfai? schweser? stalla?