Ethics

CFA Level I
#1

Justin, CFA, filed for bankruptcy two years ago because of medical bills. He was hired recently as a mutual fund manager. According to the Standards, much him disclose his bankruptcy to his new employer? (A) No (B) Yes, b/c he has a duty of loyalty to his employer © Yes, b/c bankruptcy represents a potential conflict of interest (D) Yes, b/c bankruptcy reflects poorly on his conduct and character

#2

A

#3

C

#4

mambovipi Wrote: ------------------------------------------------------- > C mambovpi Why would u consider bankruptcy a potential conflict of interest

#5

A - doesn’t reflect poorly on his professional integrity, except if he has acted deceifully but we don’t have evidence of that.

#6

A

#7

Here’s the official answer (mock1): standard VI(A) disclosure of conflicts. Members must make full and fair disclosure of all matters that could impair their independence and objectivity to clients, prospective clients, and employe. such disclosures should be prominent, delivered in plain language, and communicate the relevant information effectively. The bankruptcy may impair Temasek’s independence or conflict the employer’s interest. I’m way off here (i chose A - wrong). Can smone explain?

#8

I still think it is A

#9

that’s my confusion as well: according to the mock it’s C

#10

gogiants Wrote: ------------------------------------------------------- > that’s my confusion as well: according to the mock > it’s C schweser or CFAI mock, Schweser makes errors all the time

#11

mock#1

#12

i think its still A. something must be wrong with the explanation above. Bankrupy has nothing to do with employee negative behaviour at the office.

#13

I have seen a very similar question where the explanation said that a personal bankruptcy due to health bills was not an issue - at least that is what I recall. I thought the answer was A. Where is this from?

#14

I would stick with A. Similar question was posted on the CFA Sample 1 Test and here was the answer to that. Members who are involved in a personal bankruptcy filing are not automatically assumed to be in violation of the standards because bankruptcy may not reflect poorly on the integrity or trustworthiness of the person involved.

#15

#12 from mock 1 12 Crandall Temasek, CFA, filed for personal bankruptcy two years ago after incurring large medical expenses. He was hired recently as a portfolio manager. According to the CFA Institute Standards, must Temasek disclose his bankruptcy filing to his new employer? A. No. B. Yes, because he has a duty of loyalty to his employer. C. Yes, because bankruptcy represents a potential conflict of interest. D. Yes, because bankruptcy reflects poorly on his conduct and character. Members who are involved in a personal bankruptcy filing are not automatically assumed to be in violation of the standards because bankruptcy may not reflect poorly on the integrity or trustworthiness of the person involved.