Sample exam 2 Q5 Jim James, CFA, supervises several financial analyst at his firm. James’ compensation in the firm is tied to the commissions of the brokers in the firm. James tells Sally Jones, an analyst, to use a report prepared by a rival firm as the basis for her report. He tells her that she will need to make minor changes and that she can then put her name on the report before sending it to clients. The reprot contains a “BUY” recommendation on a stock in which Jamess’ supervisor owns a large stake. Which of the following statements is TRUE? If Jones complies with James’ request: A. She has violated Standard I © Misrepresentation, but James has not. B. Both she and James have violated Standard I© Misrepresentation. C… D… I think B. But the answer is A. Can anyone help to explain A or echo that the answer sheet is printed wrong? thx!!!

I got that one wrong too. But I guess it’s because that he only told her to use her name, so he wasn’t misrepresenting anything. She was the one that had to decide to put her name or not.

I had got this on an old shweser test. the correct option was that Jones had violated misrepresentation and james had violated supervision. didnt make sense to me though… i had also gone with B.

It is quit misleading

yeh i chose B aswell… i always thought that the supervisor was in a way responsible for the violations of their underlings, ESPECIALLY when they directly told them to do the violation… sorta like, if you order someone else to murder someone, you’re just in as much trouble as if you had done it yourself…

James has violated responsibiliy of supervisors and knowledge of the law etc…but not misrepresentation. That is the difference.

but if james ordered his underling to commit misrepresentation, shouldn’t he also be liable of that? i guess its all good though… a violation of one or the other is just the same… like, it no worse/better