Reading 1: Code of Ethics and Standards of Professional Con process, structure

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Session 1: Code of Ethics and Professional Standards
Reading 1: Code of Ethics and Standards of Professional Conduct
LOS a: Describe the structure of the CFA Institute Professional Conduct Program and the disciplinary review process for the enforcement of the Code and Standards.

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Which of the following statements regarding disciplinary procedures is FALSE?

A) A hearing may be held by telephone.

B) The designated officer may appoint others to act on his or her behalf.

C) The findings of a summary suspension review panel are final and conclusive.

D) The findings of a hearing panel are final and conclusive.

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Which of the following is least accurate regarding reasons for imposing a summary suspension upon covered persons?

A) Failure to return the annual professional conduct statement.

B) Misdemeanor charge for the possession of illegal narcotic substances.

C) Disbarment under securities laws.

D) Failure to cooperate with a CFA Institute investigation.

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A covered person who rejects a stipulation agreement:

A) will typically not be subject to further disciplinary procedure unless a new investigation is initiated.

B) may request an appeal to a hearing panel.

C) may request an appeal to a summary suspension review panel.

D) may request an appeal after waiting until two years have passed.

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A CFA charterholder may NOT be suspended without a hearing for which of the following reasons?

A) Failing to respond in writing to charges filed by his/her immediate supervisor.

B) Being convicted of murder.

C) Being indefinitely barred from registration as a broker.

D) Failing to complete the annual professional conduct questionnaire two years in a row.

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With respect to filing complaints concerning the professional conduct of a CFA Institute member, which of the following is TRUE?

A) Anyone can write the Standards and Policy Committee staff with a complaint concerning the conduct of any member.

B) Only other members can write the Professional Conduct Program staff with a complaint concerning the conduct of another member.

C) Only other members can write the Standards and Policy Committee staff with a complaint concerning the conduct of another member.

D) Anyone can write the Professional Conduct Program staff with a complaint concerning the conduct of any member.

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Steve Jones is a member of CFA Institute but has not earned the CFA designation yet. CFA Institute is investigating Jones activities. If Jones declines to cooperate, he:

A) is within his right only because he does not have the CFA designation yet.

B) is within his right only because it could be self incriminating.

C) is within his right either because it could be self incriminating or because he does not have the CFA designation yet.

D) could be summarily suspended from membership.

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With respect to the CFA Institute enforcement of the Code and Standards, which of the following is NOT a possible disciplinary sanction?

A) Payment of a fine.

B) Refusing to allow a candidate for the CFA designation to take one of the exams.

C) Private censure.

D) Revocation of membership in CFA Institute.

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A broker and CFA charterholder has been arrested for the crime of murder. Which, if any, of the following could result in the member being summarily suspended from using the CFA designation?

A) If he is convicted of the crime only.

B) Either being convicted or pleading guilty to the crime.

C) All of the results listed here.

D) He is acquitted of the crime, but he is barred from continuing to work in the investment industry.

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Which of the following correctly lists disciplinary sanctions in order of severity, lowest to highest, that the Designated Officer may take as a result of an investigation?

A) Suspension of the CFA designation, public censure, revocation of the CFA designation.

B) Suspension of membership, revocation of membership, public censure.

C) Public censure, suspension of the CFA designation, revocation of the CFA designation.

D) Public censure, revocation of membership, suspension of membership.