Ethics (fyi for June 7th)

Doug Watson, CFA, serves in a sales position at Sommerset Brokerage, a register investment adviser. As part of his employment, he is expected to entertain clients from time to time with dinners, professional sporting events, and golf outings. Frequently at these client outings, Watson drinks excessively. On one occasion, after dropping off a client, Watson was cited by local police for public intoxication. According to the CFA Institute Standards of Professional Conduct, is Watson in violation of either Standard I(A) Knowledge of the Law or Standard I(D) Misconduct? I(A) I(D) A) yes yes B) yes no C) no yes D) no no Answer is D… just to let you guys know for after the exam :P. Apply what you have learnt K!!!


Good one… Btw is the answer really D? I thought it is no,yes © as it reflects adversely on their professional reputation… I saw a similar question on Schweser… I am not meeting any clients on Saturday evening, I should be ok either way.

it was from schweser practice exam 1 pm. Their reasoning was that, being drunk after work hours does not hinder your ability to work at a professional level during your normal duties. Sometimes i wonder if the questions Schweser comes up with are align with CFAI’s reasonings.

In my opinion it’s crossing the line as the individual did drink too much with clients. But Doug from Schweser said there is nothing against the code of ethics about going out drinking after work. His words, “Drinking too much on a Friday night and crashing your car through the 7/11, well, that happens.”

Schweser Book 6 ethics is weird. The questions asked were very different from mock ethics. I am gonna read only CFA text on ethics from now onwards.

this still goes against principle that not matter if you cheat on an cfai exam or any other exam it is still against the code…why the double standard?

This question has been discussed TO DEATH. He is not in violation of any standard because he did not violate a law… if you read it closely, it does not say that he was intoxicated when cited by the cop… he just received the citation. It’s a sucky question but D is correct.

“On one occasion, after dropping off a client, Watson was cited by local police for public intoxication.”