One of those...Ethics..

Weltzel’s manager asked her to write a reseach report on Nano products, whose stock currently sells for #1 a share. Her brother, who has no connection with Nano, gave her 10-year old son 50 shares of Nano as a birthday present. Weitzel disclosed this info to her manager, who allowed her to write the report, but did not disclose the fact that her son owns 50 shares of Nano stock in the report itself. In the research report, Wietzel did not recommend buying Nano in the near term. Violation: Yes/No?

I would say No - but could be wrong. They probably mention $1/share for a reason, its so insignificant at 50 shares its not enough to interfere with her independence and objectivity, and she issued a “don’t buy” recommondation anyways.

I am thinking the same thing as Reggie.

My answer would be ‘No’

Reggie is correct. $50 is something like 0.00000000001% of the market cap.

if $200? would it then be significant and hence violation?

i was thinking yes if she had beneficial interest and no if not. If there is some rule about less than a dollar amount or a small percentage of shares requires no disclosure then other may be right…

Dan, COI are not measured based on proportion to the mkt share, but on how significant it is to person subjected to the standard…imo. I could be wrong.

Yeah we’re talking about $50 here and I think the question is suppose to test an insider’s integrity to make clear and unbiased decisions. I really can’t see this being in violation of the standards.

Thanks everybody.

What is the answer? If she is disclosing that her brother’s son has the shares, shes doing it for a reason–she feels she needs to. Maybe this is the hint the quqestion is trying to give us. I’m leaning towards yes because someone related to her had share in the stock–the standards don’t make any specifications about % market cap. Also, although the 50 shares are a minimal amount, the idea of the standards is to not even portray impartiality

The standards say disclosure is only necessary if the beneficial ownership can be reasonably be expected to impair their objectivity (something along those lines) IMO, $50 of stock would not impair one’s ability to be objective.

why then did she disclose the info about her brothers son?

good qn show ny… schweser, i think gets a little more creative than the real deal… imo.

Definitely NO its not beneficial

another wonderful question