Ethics is 100% unpredictable.
“Carlyle [a research analyst] remains impressed with Paladin’s [subject company] growth opportunities and attention to customer satisfaction. Robinson [portfolio manager] asks Carlyle to meet with several potential new clients for Marietta [the portfolio manager and research analyst’s firm]. He believes that demonstrating his direct access to Street research analysts will help him gain new clients. Several minutes prior to the start of the meeting Robinson introduces Carlyle to one of his existing clients. Carlyle reviews with them a recent conversation she had with the Paladin CFO regarding new growth opportunities which she plans to include in her next research report. Carlyle meets with Robinson’s potential clients and discusses the stock research process.”
The answer is given as:
“Neither Carlyle nor Robinson has violated the CFA Institute Standards of Professional Conduct during the meeting with Robinson’s potential clients. By asking Carlyle to meet with several potential new clients Robinson is simply attempting to grow his client base. By merely discussing her research approach Carlyle has not given preferential treatment to these potential clients. Carlyle has not violated the standards as she has only discussed the research process and did not disclose her most current research.”
How is the bit in bold not a violation!?