no violation
I think the fact that a client had called up and was upset was a red herring. That was to suck people in to thinking a violation had occurred. I didn’t see it personally but there was also a different level of service offered.
it was an earnings revision. why didn’t he just send a fully disclosed email instead of sending one that didn’t have enough info, then going to actually explain it on the phone. an email is fine. a “flash” email for an pt/earnings revision is not.
no violation, he emailed everybody at the same time
that trade allocation policy was a violation right? assuming it disadvantaged other clients?
yeah the trade allocation wasn’t fair
Violation … he is not allowed to send a ‘flash email’. he must give all clients the opportunity to fully assess the new information in DETAIL before selectively communicating with clients.
this is right in one of the examples within Fair Dealing. Email then calling is fine.
bevrez1 Wrote: ------------------------------------------------------- > Violation … he is not allowed to send a > ‘flash email’. he must give all clients the > opportunity to fully assess the new information in > DETAIL before selectively communicating with > clients. I could’ve sworn I’ve seen something like this in CFA readings in earlier levels. If he would send an email to all, and then start TRADING for the biggest clients, then yes, it would be a violation. The violation is that he did not allow smaller clients to assess the new info and voice their preference about whether they want this stock traded for their account too. In this case he’s meerly calling the bigger clients to discuss details of the report, extra service like this is typically offered to clients who have big accounts (and pay bigger fees).
no violation!..how on earth can he call everyone at the same time? he sent the falsh email…and then started calling…you have to start somewhere…plus it just said the client complained because he did not call them sooner…but they would have gotten the email just like everyone else…and presumably he would have called people after them…so they are not completely disadvantaged…basically you can’t call everyone at once!
No violation as sent email to all and was simply talking to clients based on size of AUM…nobody put at any disadvantage.
the problem comes where multiple clients who weren’t called are complaining about receiving inadequate info. the flash email didn’t provide enough info for them to build an opinion and act, thus they are not receiving adequate service and those who are called are receiving the info before those who are not called. this is not a difference in service, this is no service for the poor, service for the rich. clients wouldn’t have been calling complaining about a lack of info if they received any service. his flash email could’ve said: MSFT earnings revision up! price target revised up! on news! and then he went and called clients to provide real information. there would be no complaints if clients understood the level of service they were being provided.
From Standards book: Example 6. Jenpin Weng uses e-mail to issues a new recommendation to all his clients. He then calls his three biggest institutional clients to discuss the recommendation in detail. Comment: Weng has not violated Standard III(B) because he widely disseminated the recommendation and provided the information to all his clients prior to discussing it with a select few. Weng’s larger clients received additional personal service that they presumably pay for through bigger fees or because they have a large amount of assets under Weng’s management. Weng would have violated Standard III(B) if he had discussed the report with a select group of clients prior to distributing it to all his clients.
yeah I remember this question and clear forgot about it during the exam. D@mn it! - 3 pts for AFJ
Yah, i thought about this but then there was no mention of higher fees paid.