Tom is a port mgr at Wellington Partnership, a small investment firm that deals exclusively with high net worth clients. One of Tom’s existing client, Joseph has been very pleased with the investment performance of his port over the last 18 months To provide an incentive for future port performance, Joseph tells Tom that he will provide a bonus of S$5k per year if his port performance exceeds 10% each year. The S$5k potential bonus is relatively small compared to Tom’s annual salary and bonus and it will not change the way Tom manages all of his client accounts. Under the standards, Tom must: a) not accept any additional compensation from client bec it creates an obvious conflict of interest b) include the bonus in his annual disclosure to his employer if he actually receives it c) obtain written consent from his employer before accepting the bonus arrangement d) provide written disclosure of all the terms to all his clients before accepting the bonus arrangement
C?
c!
C as well
Three C’s in a row probably mean that the answer is C, but I would put A. I haven’t read the code since the first week of June 08 so I could be wrong, but I thought PMs were prohibited from accepting gifts. In fact, I think that the language read “token items only.” Despite 5k being small relative to his salary and it not affecting his managing of accounts, another client could perceive that Tom might trade in Joseph’s portfolio first.
i’d go c as well.
Bankin’ Wrote: ------------------------------------------------------- > Three C’s in a row probably mean that the answer > is C, but I would put A. > I would tend to think that three Cs in a row means C is wrong. Ususally only traps are posted on AF.
mwvt9 Wrote: ------------------------------------------------------- > Bankin’ Wrote: > -------------------------------------------------- > ----- > > Three C’s in a row probably mean that the > answer > > is C, but I would put A. > > > > I would tend to think that three Cs in a row means > C is wrong. Ususally only traps are posted on AF. Could be. The more I think about it, the more I like A. Rather than thinking of $5,000 relative to his salary, why not think about what $5,000 buy? If instead of $5,000 cash it was two round trip tickets to Maui ($1600), 5 nights at the four seasons ($2000), snorkeling with dolphins ($400), and $1000 gift certificate at the 4 Seasons spa would everyone still say that he can accept it? I’m interested to hear which answer is correct.
Here’s the answer (I got it wrong too): B. Reason being the S$5k is immaterial and there is no conflict of interest. It is tantamount to accepting a small gift of US$50. C will be appropriate if the amount is material relative to his fixed remuneration. Cheers.
Is this an actual question or something made up? I am under the impression that cash gifts are STRICTLY prohibited no matter what the amount. If it was a “VALUE” worht $5k like staying 1 week at the persons timeshare, then this would be ok as long as written consent is obtained BEFORE the trip AND it DID NOT influence the port managers objectivity, than this will be ok. Remember, if this was not a client, but a 3rd party like a broker dealer, this would be strictly prohibited since it would be seen as trying to influence.