Ethics- communication

I think I may have gotten confused while going through Qs-

Is it true that we would violate the Communication w/ Clients Standard if we created a model to pick stocks but then only disclosed its nature in general terms.

I might be wrong but I thought I had come across a problem which indicated if you disclose in general terms you are OK, and not violating the standard…

Sorry I know this is a little vague…basically trying to confirm exactly what about our model we’d need to disclose…

Additional question- I think this is more geared toward the ‘Misrepresentation’ Standard-

If we say something like 'You can expect superior returns with us because our model has worked well in the past"- this is a violation.

But I’m curious if you could say “You can expect to earn superior returns.” I know we can’t turn opinion into certainty, but since the term ‘superior returns’ is all relative, curious if this would be ok?

sorry 1 more-

I can’t seem to figure out- if we violate Misrepresentation by plagiarizing, do we also, by default, violate knowledge of the law? every time?


If the client requests further info about your model, you must deliver all the info requested. Also you can provide more if necessary. Commonly, sophisticated investors (institutional) ask for detailed info. Retail investors could also request, so you must deliver no matter what.

You can’t assure a target return, because you simply can’t. Superior returns, you know, are those the returns above the risk-adjusted return (alpha). Not everyone can provide alpha return for their clients.

It depends. For example, are you plagiarizing trademark info? Are you plagiarizing in an exam? The first one violate the local law probably. The second one not necessarily.

It’s not like you’re breaking the law by copying a classmate. Unless you think he has his exam answers copyrighted?!?! haha