Todays (11.20.10) WSJ headline reports… …"…potential to expose a culture of pervasive insider trading in US financial markets, including new ways nonpublic information is passed to traders through experts tied to specific industries or companies…" …"…nonpublic information was passed along by independent analysts and consultants who work for companies that provide “expert network” services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge." …"…are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars…" Is this a breach of CFA Standard (II-A) - Material Nonpublic information? If so, under what premise are expert networks like Primary Global Research LLC and Broadband Research LLC operate? After all they connect ‘experts’ to clients. Lastly, it is sad to see that on one hand CFA candidates are being trained to follow the standards but the industry they find their livelihood in is full of practices that have no regards for such standards.
if they’re found guilty of insider trading, i don’t see how it wouldn’t be a breach
Wall Street’s biggest names involved: Goldman Sachs, SAC Capital, Wellington, Jennison, MFS Global, Maverick, Citadel, and others. …"…the game is rigged for decades…"…yahoo finance tech ticker so CFA charter holders have utter disregards for standards or guys who are CFA charter holders who follows the standards can’t speak up or ‘disassociate’ and bring to ethics compliance attention, or ethics compliance departments are dummies… either of the cases the values learned in CFA program appears to be lost in the real world.
Trading on material non-public information is ILLEGAL in the United States. Following the law is not a “standard” only learned in the CFA Program. It is a basic building block of a civilized society.
whatever dude…practices can be designed to be LEGAL although they may not be ETHICAL hence the reference to revered CFA standards on which LI , LII, and LIII candidates are rigorously tested, and the point of frustration is how candidates get dinged for incorrect answer on paper whereas the real artists are hard to catch.
So, if your “point of frustration is how candidates get dinged for incorrect answer on paper whereas the real artists are hard to catch,” are you saying that in the United States CFA candidates/charter holders are held to a higher standard regarding trading on material non-public information (which is what the original post regarding the WSJ article referenced)?
CFA standards are applied the same WW so where is the question of ‘higher standards in US’? Rather, despite the standards the scale of insider trading is far more prevalent in U.S.
Why do you think insider trading is more prevalent in the US than elsewhere? It is probably policed better in the US than most (or perhaps all) other places.
“despite the standards the scale of insider trading is far more prevalent in U.S.” I have my doubts about this, do you have a source? Honestly, I sympathize with your position, but I think the source of your frustration is the general human condition and not anything unique to the financial industry.
CFA standards are the same worldwide, but laws are not. While trading on material non-public information is illegal in the United States, it is not illegal throughout the world. Therefore, EVERYONE in the securities industry in the U.S. is prohibited from trading on MNPI. However, in foreign countries where it is NOT illegal to trade on MNPI, CFA candidates and charter holders are still prohibited from doing so because of the Code and Standards, but others are not prohibited from doing so. So, in some foreign countries those in the CFA program are held to a higher standard. But, your original post implied that you were upset by the WSJ article regarding trading on MNPI in the UNITED STATES and that as a CFA candidate you are held to a higher standard. You are not! You are held to the same U.S. securities law that makes trading on MNPI illegal that everyone else in the securities industry is held to. Your first post said, “it is sad to see that on one hand CFA candidates are being trained to follow the standards.” Is the CFA program “training” you to follow U.S. securities law? If so, that’s too bad. Your next post says, “the values learned in CFA program appears to be lost in the real world.” Again, is the CFA program “teaching” you the “values” of FOLLOWING U.S. SECURITIES LAW, and following those laws is “lost” on those who are not in the CFA program? Plus, in the same post you impugn others in the CFA program by suggesting they might be “disregarding” the Standards, or are too weak to “speak up,” or they are “dummies.” Those are your words and they are lame! Then, you wrote, “the point of frustration is how candidates get dinged for incorrect answer on paper whereas the real artists are hard to catch.” Really!? You’re frustrated by the fact that you get dinged on an exam regarding something that is ILLEGAL while at the same time it is hard to catch bad people who break securities law?! Finally, you wrote, “the scale of insider trading is far more prevalent in U.S.” This is 100% incorrect. Remember, insider trading is not illegal throughout the world. It happens every day in the wide open in countries where it is not illegal. Check your facts!
Hi ForwardPass, with due respect, I still think you are not getting my point. you keep refering about trading on MNPI as ILLEGAL, I don’t disagree, but beyond that I am saying, there are several ways to make any practices LEGAL. Once made LEGAL (although in true spirit UNETHICAL) they are outside boundaries of LAW right? so then the only way these practices can be curbed is by adoption of higher standards (such as prescribed by CFA institute). And that’s where I think in the real world people don’t seem to ‘walk the talk’ if you know what I mean!