So… say if someone who is a retail broker manages client accounts. He notices that one client is extremely good at buying undervalued stocks - and he decides to follow that client’s every move for his personal account. The answer says that this this broker did not violate anything… but I just feel like he did, because this seems sketchy to me. (doesn’t pass the “smell” test) Anyone care to weigh in?
I think the trick here is that its his personal account, if he were doing these trades in other client accounts it would be a violation because he wouldn’t have done diligence or have reasonable basis for the recommendation. That aside, definite grey area because I think that would constitute misconduct, as it reflects negatively on the profession and the CFA institute.
I think the trick here is that its his personal account, if he were doing these trades in other client accounts it would be a violation because he wouldn’t have done diligence or have reasonable basis for the recommendation. That aside, definite grey area because I think that would constitute misconduct, as it reflects negatively on the profession and the CFA institute.