Ethic Question

Harry, the Hotshot, salesman got a tip from his brother about Kansas Power Tools. He sees that his company’s research department has a sell rating on KPT, and says, " I know better." He reads the annual report, taking notes and marking it “Buy takeover target”(analyst’s rating is sell). If the recommends the stock to his clients, Harry: A. Has violated the code because the analyst has a sell rating B. Has violated the code because he has not done sufficient research, including metting management and comparing the company to others in its industry C. is not in violation of the code D both A and B are true

In real exam, there will not be D as above. I pick B. He violated Standard V(A)

c for me but am kind of confused since he’s not an analyst

he actually does not need to meet the management. However agree that he has not done enough research – and hence in violation Choice (B).



on actual test, these will be clearer…in regards to how much research he has done. I’d say C, given his research was sufficient, and he notes it as a takeover target. Again, the test makes the amount of research clear, and it’s the Standards, not Code he would be violating…I believe, June has been a while.

Answer: C is correct Analysis of he basic characteristics of the investmnet is sufficient basis, for a recommendation. thus, ansers a and b are wrong. he must keep written records that indicate the quality rating and basis for recommendation. He has complied with his regulation. this just sounds so new to me/

frankly i don;t agree with this question. It is flawed and so are the answer choices. I just hope the actual exam doesn’t contain such garbage…

where did u get the question? my answer would definitely be B as well. Fact that Harry is not an analyst doesnt matter as well because he was making an investment recommendation. Also, just because he has read an in house report does not mean that he has done sufficient research… questions i’ve seen include the “analyst” extracting his own numbers to run models or even talk to comparable industry players.