Ethics - Question of the day

Good night guys, will leave you alone with that schweser stuff… And good luck with your exam, may be you will need it.

Good call map1.

Good morning together, hope you slept well. So here what page 26, cfai-book third bullit point says: “…to ensure that research analysts do not report to … any department of the firm that could compromise the independence of the analyst.” As the questition said: “McNies goes to Todd’s office and requests that he omit a few…” That’s a direct violation due to the fact that research report shouldn’t be available to the sales director. Since somebody gave the report to McNies, we have a situation mentioned above from cfai. The fire wall is down.

so after all of this… what is the correct answer?

Schweser says B, from the CFA quote above, I strongly conclude B is wrong and recommend C. In my opinion it’s just a trash question.

cfaisok, try reading the question one more time. This question is about Todd, not McNies.

cfaisok, if you read the entire bullet and not pick and choose from it what fits your judgment, you would see that it relates to policies that a company should implement to protect independence and objectivity of analysts. If you want to see an example about pressure on an analyst, read example 5 on the next page. Saying “I’m going to a George Michael concert” is not the same as saying “I’m going to the concert, that is if I can get tickets” (on a side note, I do have tickets).

thank you, will read it and reply later

From your example “J. must only issue recommendations that reflect only her independent and objective opinion.” I would feel compromised… May be my personal moral standards are too high? I don’t think so, the majority of the people in this thread choose C as well. And with this quotated CFA sentence I think they are right and B is wrong.

That example is a true example of pressure on an analyst, not the above.

that is something the analyst can decide better than an outstanding person. It depends on the situation and as well on personal judgement… I am an analyst and I would first talk to my supervisor, before modifying anything for sales people. Feel free to bow your report a bit, I wouldn’t do that because of my independence. I mean, if am independent i don’t have to modify the report. So I will talk to my supervisor. Due to the fact that schweser provides no supervisor answer i will cry for the compliance officer. It’s that easy. P.S. Are you working as an analyst, too? It would be interesting to know for which company…

No, I am not. Don’t blame me for BSC!

@uhohcfa we just decided for C @fisherSU “Re: Ethics - Question of the day Posted by: FisherSU (IP Logged) [hide posts from this user] Date: May 14, 2008 02:52PM cfaisok, try reading the question one more time. This question is about Todd, not McNies.” From the fact that McNies comes to Todd (and not vice versa) you conclude that there is no problem of independence?

To FisherSU: I will retire now from this thread, maybe you find other candidates to convince of the high quality of the question.

Correct answer: B -Case Closed-

peace be with u