I am being investigated by CFAI

CFA Level III
#141

Allow me to expound on my earlier statements. Based on your response, it is clear that more explanation is required.

You are implying that a person’s morality is determined at birth. According to you some people are born with a superior morality than others. This is an inaccurate statement bacause you can not find any backing for it in science. You will have to rely on some kind of faith or on some kind of belief system or on anecdotal evidence to back your claims.

What I am saying is that morality is not determined at birth. An individual’s morality is continuously nurtured through his / her interactions with his / her surroundings.

So, in other words, the society, in which a person lives, plays an important role in shaping his / her morality.

If you live in a society where adhering to traditions or rituals makes you a morally good person, you will place more importance on adherence to rituals. For such a person, CFA ethics may be secondary. For example, in some societies, if you touch the feet of elders every time you encounter them, you are immediately considered a very nice person because you are humble. In these societies, if you are clocking in 8 hours after working for only 6, it may not be considered as an immoral act. Notice that the latter act actually has more negative impact on our society. But you as a member of such a society is more likely to follow the tradition of touching the feet of an elder than not inflating your work hours. Such societies invariably focus more on ancient scriptures than on the ever changing society. Further examples could include the following.

  1. You will completely ignore traffic rules, but you will not be open to premartial sex.

  2. You will ingore CFA ethics, but you will be very religiously performing rituals every full moon.

  3. You will evade taxes as a small businessman, but you will never try alchohol.

These socieities will use a whole set of proxy rules to judge your morality. For example: A non-smoker is a good person, while he might be the biggest tax evader. Non-smoking is easily observable, where as small businessman can easily hide his revenue. So smoking becomes a proxy for moral behavior.

But, if you follow scientific methods of interrogation, it will be clear that not following traffic rules has more impact on humanity than following the tradition of abstaining from premarital sex. If you do not follow traffic rules, others will copy you and they will not follow traffic rules either and the entire neighborhood is rubbished. But, if you abstain from consensual premarital sex, you are only missing out on lots of good fun.

P.

#142

Everyone is born with a moral compass, except sociopaths. But if you go to different countries their definitions of what is moral behaviour is very different. Things that we think are terrible in the US are perfectly acceptable in other places. The CFA code of ethics does a good job of trying to enforce an American level of ethics on the entire planets financial system. Good luck with that boys. It’s the most hopelessly nonsensical idea since the UN, yet I still kind of root for it. I give my employees lectures on ethics all the time. It’s amazing how they see the world so much differently than I do.

#143

I’m affraid i cannot agree with the statement. In my opinion the CFA Ethics rules seem to relate to economics, i.e. to contracts. Following the uniform rules people are supposed to be able to reduce costs of their investment decisions by reducing the uncertainty (guessing) factor. Recall risk free vs risky calculations.

#144

I could not agree with you more ChickenTikka.

#145

I think you mean a psychopath and not a sociopath.

Sociopaths simply display antisocial behaviour whereas psychopaths are those marked by cunning and deception for their own means.

The latter, I feel, would be more likely in someone with highly unethical attitudes.

In either case, I think you are talking in extremes and I have meet many people over time who lack an ethical bent without being psychopathic.

#146

psriniva, very good, long, and completely useless tirade… What does smoking or premarital sex have in common with Code of Ethics??? Complete rubbish, I’m sorry to say that. You can be very religious, conservative, dedicated to tradition etc., and still act professionally, ethically, and not ‘inflate your working hours’!

I tell you more - people who can abstain from premarital sex (because they believe it’s right to do) are, in my opinion, very much more likely to also abstain from e.g. front running (because they also believe it’s bad and immoral).

#147

This article reminded me of this thread:

http://www.slate.com/articles/business/the_dismal_science/2012/09/business_school_and_ethics_can_we_train_mbas_to_do_the_right_thing_.html

#148

Hello everyone,

I am thinking that the Institute got its point across by scapegoating the two candidates in 2009 and that you won’t see many more 5-year public censures going forward. Passme, I am sorry that you are in this situation and I wish you the best.

I’m not sure how many of you all saw the spreadsheet that caused the censures but, trust me, it was nothing to write home about. Anyone who didn’t take the exam would not have been able to make heads or tails of that document. How you can recreate a vignette-based exam question in 5 words is a mystery to me! The value of the spreadsheet was the way you could guess your score by probability-weighting your answers. How that deserved a sanction 5 times greater than that given to someone allegedly posting exam content while the exam was still taking place is a mystery to me!

The institute decided that it was going to send a message to the people on this forum and they did a great job of it. I truly hope nobody has to endure such a lopsided sanction again.

#149

I have been following this thread for some time now… While it has totally digressed, the Nature vs. nurture argument as MarkCfail aptly puts it is turning out to be quite interesitng. I think Markcfail is right that you cannot teach a guy in his early adulthood the merits of being ethical. Having said that, the pupose of CFA’s ethics topics are also addresses the “how to be ethical” part. I’m pretty sure that the myraid and often complex situations that CFAI simulates, can surely confuse lesser mortals like myself who would want to be ethical but the “ethical path” may not be so obvious. This is where the CFAI Ethics section can help - It may not persuade you to be ethical in real life, but if you are ethical in the first place, it will help you make ethical decisions in complex situations.

#150

I think the Code and Standards are pretty stupid in many ways. If you’re a decent person, you basically don’t need all that. Little rules like “how it would like in the press” or “what would your mom think?” are better. If you’re a crook, you can actually use the Code to your advantage (have to know the law to break it yadda yadda).

I remember a weird question (don’t remember if Mock , Schweser or whatever) - basically the client had a portfolio that was going down fast. The client was sick and told you to wait since he would soon get better to fix the portfolio himself. He kept getting worse for like 2 years, unable to manage anything. Nevertheless, it was OK to let the dying client’s porfolio get screwed and never ever call him back or try any kind of follow up. In my notes I wrote something like "for the exam you can let your dying client get screwed as long as you covered your ass in such and such way … "

Then, at the same time, there’s another question/text/whatever (this is Schweser’s) that say I may lose my charter if I tell mommy that some derivatives question was hard.

Letting your sick client die poor was fine. Sharing your day with your mom was evil. Both questions had very reasonable explanations quoting the Code and what not, so maybe they should rethink their priorities a little bit.

How about, as long as your employer is OK with it, you can accept nice gifts from specific clients to reward performance? Who cares how this incentive may affect all the other clients, or how they would feel about it? But use the CFA as a noun and you should feel the wrath…

I wonder what’s the percentage of charterholders that thinks its important to never let the three letters used as a noun. Or how many thinks its important to maintain absolute secret about the questions from past exams.

That said, I actually think its good to teach Ethics. There’s some research showing that thinking about an Ethics code, or the Ten Commandments, or whatever people believe to be the right thing, actually makes them behave a little better (as in less stealing/cheating). That would justify that pledge everybody has to sign at the exam. Maybe CFA could just make a smarter, shorter code.

And, as somebody here pointed once, if you make a Code of Ethics for which people study hard for months/years and they still end up with a poor understanding of it, maybe that’s something wrong with the Code.

#151

I don’t understand why people have such problem with ethics. First of all, the ethics section is not a test of morality. It is a test of logic. The purpose of ethics is not to make anyone more moral; it is simply testing to make sure you have the mental capacity to act in a logical manner. That is an important distinction that I think many people are missing.

#152

Crazyman

Your post just made me recall a fantastic writer George Orwell and his “Animal Farm”. This is like things go in the former USSR countries. As you might remember there were two intelligent ‘comrades’ - i quote “…pre-eminent among the pigs were two young boars named Snowball and Napoleon, whom Mr Jones was breeding up for sale.” These two made revolution at the farm, took power and wrote the principals of Animalism just in seven COMMANDMENTS:

  1. Whatever goes upon two legs is an enemy.

  2. Whatever goes upon four legs, or has wings, is a friend.

  3. No animal shall wear clothes.

  4. No animal shall sleep in a bed.

  5. No animal shall drink alcohol.

  6. No animal shall kill any other animal.

  7. All animals are equal.

“Snowball read it aloud for the benefit of the others. All the animals nodded in complete agreement, and the cleverer ones at once began to learn the commandments by heart.”

Funny, isn’t it?

#153

I don’t know. I just memorized a bunch of rules and classifications, learning where to classify each sub-item, what rules they think its OK to break (recommendable) and how to avoid being “too ethical” on the test. All that stuff about knowing if some violation falls under Conflict of Interests or Independence and Objectivity seems pointless - who cares about how they classify it? I studied it hard and got >70s, and yet I don’t feel more ethical or more logical from it.

And if it is truly a test of logic, then I’d think there may be more reasoning to have a problem with ethics - why memorize all those classifications if they just want to test logic? Wouldn’t it be better to just throw some brain teasers on the exam?

I favor ethics on the exam - but I just think it could be written differently. More “spirit of the law” and less details on how much you can force the system and still be ethical.

ua_bender - That’s awesome. I can see that comment working just right in Brazil as well.

When somebody knows a lot about the law and isn’t a lawyer, instead of thinking “this guy is pretty smart” I just get very careful…

#154

Sept 12th

No updates

#155

Someone somewhere in this world knows my score…

#156

Don’t give up hopes.

#157

oh man passme…still not resolved?

#158

Any updates? If they have to come up with a verdict, it has to happen now, else, when would a person re-register and start preparing for L3 in 2013! Very limited time.

#159

What’s going on with this, passme? Hoping the best for you, bud.

#160

Passme, please email CFAI and ask for an update. We are dying to know.