Ethics Question from SOPH

I have this question in my print out of Study session from CFA website but I don’t have answer to this particular. I couldn’t find the same question in current version of SS1 on CFA website. Question says it is from 2005 CFA examination. Martin Bogwell, CFA conducted a thorough analysis and issues a research report on a manufcuring company. In the report, Bogwell included his opinion that he was uncertain about the ability of the company to perform on a contract. The CEO of the company disagreed and submitted a complaint to Bogwell’s supervisor. The complaint alleged that employees of the manufacturing company explained the contract to Bogwell, but that he did not accept their explanation. According to Standards of Practice Handbook, did Bogwell violate the CFA Institute Standard of Professional conduct relating to : Research Report Reasonable Basis? A No No B No Yes C Yes No D Yes Yes

I’d say A.

Goel, does the question ask if he violated CFA SOPC realting to 1) Research report 2) reasonable basis Cause i don;t really understand what 2 parts are we talking about here, unless they mean Standard V-A (Diligence and reasonable basis) parts 1 and 2 (1=Exercising diligence and thoroughness in analyzing investments, makinf inv recommendations,etc… and 2= Having reasonable and adequate basis supported by appropriate research and investigation for any inv analysis, recommendation , or action…) If that what they mean, that is Thouroughnes and diligence in the analysis (translated in our case into thoroughness and diligence in completing the research report), and second part Having reasonable basis for issuing such a report, then I say the answer is A) NO NO he did not violate any of them…he had conducted a thourough analysis and he has a reasonable basis since he (assumingly), as a result of the research and interviews conducted, came to the conclusion that the contract might not be realizable. In other words, he did all that is required from him in order to conduct research and issue a report. Now if some people, such as the coimpany CEO, does not agree, then it doesn;t necessarily mean that the Analyst hasn;t done his job properly. from what we see, he was thorough, diligent, and dug deep into things before issuing the report. I hope this clarifies things, please share any other opinions…thanks

i have seen this question as well. the correct answer from the book is No. He did not violate any law. point is he has the right to disagree.

makes sense to me