Ethics question

The curriculum gives this example on pg 80:

Adam Dill recently joined New Investments Asset Managers. To assist Dill in building a book of clients, both his father and brother opened new fee-paying accounts. Dill followed all the firm’s procedures in noting his relationships with these clients and in developing their investment policy statements.

After several years, the number of Dill’s clients has grown, but he still manages the original accounts of his family members. An IPO is coming to market that is a suitable investment for many of his clients, including his brother. Dill does not receive the amount of stock he requested, so to avoid any appearance of a conflict of interest, he does not allocate any shares to his brother’s account.__Comment: Dill has violated Standard III(A) because he is not acting for the benefit of his brother’s account as well as his other accounts. The brother’s account is a regular fee-paying account comparable to the accounts of his other clients. By not allocating the shares proportionately across all accounts for which he thought the IPO was suitable, Dill is disadvantaging specific clients. Dill would have been correct in not allocating shares to his brother’s account if that account was being managed outside the normal fee structure of the firm. They give this as an example of a violation Loyalty, Prudence and Care but isn’t Standard III(B), Fair Dealing, more appropriate? “Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.”

whats the problem…

If on the exam they asked you if it was a violation of

a) Standard III(A) Loyalty, Prudence and Care

b) Standard III(B), Fair Dealing

Which would you pick?

fair dealing, i see your point

It violates both, but I think they do that because Fair Dealing isn’t discussed until the next section

Yeah maybe a mistake that they didn’t mention Fair Dealing also, because with other examples if there are multiples violations (even if not discussed yet) they do reference it in the comment.

i wouldn’t worry about it too clearly understand the matter at hand and i don’t think they will make the choices THAT close

Thanks, at least I know I’m not crazy. Just going extra hard on ethics hoping for that adjustment! I suspect I’ll be borderline.