I know that record retention is 7 years but why could the records not be recreated from memory? Is it just the fact that the source document is unavailable that this is not allowed?
Lee Hurst, CFA, is an equity research analyst who has recently left a large firm to start independent practice. He is able to re-create several of his previous recommendation reports, based on his clear recollection of supporting documentation he compiled at his previous employer. He publishes the reports and obtains several new clients. Hurst is most likely :
in violation of Standard V(A) Diligence and Reasonable Basis.
in violation of Standard V© Record Retention.
not in violation of any Standard.
Hurst is most likely in violation of Standard V© Record Retention because the supporting documentation is unavailable. He needs to recreate the supporting records based on information gathered through public sources or the covered company. He may have a reasonable basis for his recommendations and have been diligent in his analysis, but must reconstruct the records of this analysis before issuing the reports.
(Study Session 1, Module 2.8, LOS 2: V©)