Ethics...

An analyst goes straight from a research seminar to a meeting with a prospective new client with whom she has never been in contact. The analyst is very excited about the information she just received in the seminar and begins showing the prospect the new ideas her firm is coming up with. This is most likely a violation of: A) Standard III(B), Fair Dealing. B) Standard I(B), Independence and Objectivity. C) all of these. D) Standard III©, Suitability. Still going… Nothing beats the Energizer… It keeps going Ok Your answer: D was incorrect. The correct answer was C) all of these. It is a violation of Standard III(B) because the analyst should act first on behalf of existing clients whose needs and characteristics she already knows. It is a violation of Standard III© because she has never met the prospect and does not know if the new ideas are appropriate for the prospect. It is very likely a violation of Standard I(B) because she is excited about the ideas from the research seminar. She may not be looking at them objectively as she discusses them with the prospect. Thus, “all of these” is the best response.

What? But they’re just “ideas” and the analyst is not giving any specific recommendations? And I never thought being excited was that bad… This is messed up.

where was this question from? i doubt its a CFAI question. i would still go with D, although A was questionable but D is a better answer. i really dont think you can say B just because the analyst is excited

This doesn’t make any sense. I’d go for D and am not convinced by the answer given here.

If it’s Stalla then I wouldn’t be surprised!!

I am with D here.

This question got me too. I’m convinced that crazy questions like this would not be on the exam, but maybe I’m deluding myself.

What source (Stalla, Schweser, etc.) is this crazy talk from?

I remember answering this question, I put C because it makes sense to me. No client should be disadvantaged in receiving info in a timely manner -> A. Differentiate between facts and opinions -> B, Suitability is obvious -> D --> C is the correct answer

maratikus Wrote: ------------------------------------------------------- > I remember answering this question, I put C > because it makes sense to me. No client should be > disadvantaged in receiving info in a timely manner > -> A. Differentiate between facts and opinions -> > B, Suitability is obvious -> D --> C is the > correct answer Agree.

well the point is that the new ideas her firm is coming up with are not actually the ones she has from the seminar, so its not biased but rather comes from a pool of research ideas (nothing to do with the seminar), how is that a IIb violationg?? secondly it never says that the new ideas have not been disseminated already so hows that a IIIB violation

I thought A and D were both true, but still don’t see how just being “excited” a violation of independence/objectivity. As far as the info was given, the analyst was very cautious during the seminar and then became excited after they made a conclusion about it.