Sharon West is a CFA charterholder and trust officer for REO Trust Company. Soon after beginning work for REO, West finds that REO has been conducting all its securities transactions through her brother who is a registered representative. West’s brother charges REO commissions that are equal to the lowest available from another broker. West’s brother tells her that if she continues doing business with him, he will give her a substantial discount on all personal transactions she conducts through him. West: A) must inform her employer of the arrangement because it provides her with additional compensation. B) must inform her employer of the arrangement because she is doing business with a member of her immediate family. C) does not need to inform her employer of the arrangement because REO has been doing business with her brother before she was hired. D) does not need to inform her employer of the arrangement because the commissions her brother charges the firm are the lowest possible. Any ideas…
I would say A as she’s getting getting additional compensation for doing something.
I would say A also - wouldn’t she have to report that even if the broker wasn’t related to her?
C/D are def out. I would narrow it to A/B and A sounds better. Point is, you go from .25% shot to 50% shot. In ethics, 1 or 2 are ALWAYS ridiculous. they always force you to really get pensive on 2.
i will go with A
Definitely A. Lower commissions are a type of supplementary/additional compensation.
definately A. as this would give her Benefit which could have an adverse effect on Independence, so she must inform the employer.