See below for my email to Schweser about the ethics. I thought it was complete BS, so for anyone else who thought so id be curious to see what you think.
Question 5) I understand why the answer could be material non public information. However, the answer could also be adequate basis. Selling out of a stock based only on the fact that one of your clients is selling a different stock in the same industry in NOT reasonable and adequate basis. Just because one stock is performing poorly in an industry does not mean the other stocks will. We also are given no information about why the client asked him to sell the stock – maybe it has nothing to do with poor prospects of the firm ,rather the client need money or is trying to diversify. Therefore, the answer should be both material info and adequate basis. This is not an option however.
Question 7) The vignette does not state that the company prohibits using other benchmarks than the SP 500, and it does not state that they are required to use it. It only states that they currently use it for all portfolios. I do not believe this is a violation to your employer by changing a benchmark therefore. Also, this helps facilitate performance presentation and evaluation for the client, so again I do not feel as this was a fair answer.
Question 8) Several problems with this one. First, no where does it state that he only invested in large cap stocks. Its says primarily in large cap stocks. The answer says this is a violation because she is 80 and should be more conservative. I counter with the fact she has a large estate, so its possible she has a high risk tolerance. Maybe she wants to leave a large inheritance to her family? It is not fair to assume that just because she is 80, she has low risk tolerance. Therefore, it is not safe to assume that large cap stocks were inappropriate for the client. To me, assuming a client has low risk tolerance based on just the fact that she is old would be a violation to your clients. There is not enough information to assume that the manager violated any standards in regards to the management of the client portfolio.
Question 9) This to me seems like a violation of supervisory responsibilities. Threatening a manager that if he underperforms leads a manager to possibly take inappropriate actions with the clients portfolio, leading to a violation to the clients. It may be a bit of a stretch, but to me threatening Van Zant is creating a work environment that may lead to future violations, so to me it seems like Silk has violated her duties as a supervisor.
Question 12) Again, I agree the answer given is correct because it violates Confidential information. However, choice A is also correct. Standard 7b states: “Members must not misrepresent or exaggerate the meaning and implications of holding the CFA designation”. Just because you have the CFA charter does not make you competent. Defending his competence by explaining the grueling process to me sounds like exaggerating the meaning of the charter. It would be ok to explain to her how hard the exams are, but saying he is competent because of the hard exams he passed is a violation. Therefore, both should be answer.
Additionally, for the Bank IPS in the morning session, we were not given any information on the banks liabilities - this makes it very difficult, if not impossible to answer the question without making many assumptions, just my opinion.