According to AIMR’s Standards of Professional Conduct Standard which of the following activities violates Standard IV(B.4), Priority of Transactions? I. Trading for the firm’s account before handling the client’s trades. II. An analyst makes trades for his son’s account before he trades his institutional accounts. III. An analyst buys stock for his own account on an inside tip while not doing so for his clients. IV. An analyst buying shares for his personal account after all the firm’s clients have been informed and their trades completed. A) I and II. B) I and IV. C) I and III. D) All of these choices are correct.
A) I and II.
Dude, this question is ancient. AIMR is now the CFAI.
I’d say A.
A III using nonpublic information IV no violation
why is trading on non-public info okay? a is the correct answer.
it’s not a violation of Standard IV(B.4), Priority of Transactions but II(A) Material Nonpublic Information
is not ok, but it is not addressed by the question; it specifically asks for breaches of Priority of Transactions.
I think that II is a little sketchy too. If his son is a client, shouldn’t he be treated the same as everyone else? I agree that A is the best answer, but still don’t really buy it…
yeah i agree, but i think they mean he systematically trades on his son’s account before the rest of his clients
yes, you are right. I didn’t read it very carefully the first time
Pepp, It is a violation to trade on insider tip but it does not fall under priority of transaction violation. You have to be careful with what the question is asking for.