Below is a question from Kaplan Q Bank, can someone explain how he is in violation of maintaining appropriate records? Is it because all of his records were in one place?
Bill Fox, CFA, has been preparing a research report on New London Wire and Cable, one of his major investment clients. He had completed much of his analysis and had planned on having his report typed and bound today. Unfortunately, his briefcase was stolen while he ate breakfast, and he lost all his notes and working papers. The lost materials included his notes from management interviews, conversations with suppliers and competitors, dates of company visits, and his computer diskette containing much of his quantitative analysis. Fox’s client needs this report tomorrow. In a panic, Fox called New London’s vice president of finance and was faxed a copy of the company’s most recent financial projections. Fox remembered that his own analysis showed that management’s estimates were too high. He did not remember the exact amount, so he revised New London’s figures downward 10%. Fox incorporated some charts and graphs on New London from a research report he received last week from a small regional research firm and some information from a Standard & Poor’s reference work in his report, without reference to their sources. Fox has:
violated the requirement to have a reasonable basis for a recommendation, the prohibition against plagiarism, and the requirement to maintain appropriate records.
violated none of the Standards.
violated the requirement to have a reasonable basis for a recommendation and the prohibition against plagiarism.