标题: Qbank: Conflict of interest [打印本页] 作者: Carson 时间: 2011-7-11 19:08 标题: Qbank: Conflict of interest
Andy Rock, CFA, is an analyst at Best Trade Co. The company is going to announce a sell recommendation on Biomed stock in one hour. Rock was a member of the team who reached the decision on Biomed. Rock’s wife has an account at Best Trade Co. that contains Biomed stock. According to the Code and Standards, trading on Rock’s wife’s account can begin:
A)
as soon as the information is disseminated to all clients.
B)
only after the recommendation is announced to the general public.
C)
only after Rock, as a beneficial owner, has given an appropriate amount of time for clients and his employer to act.
The answer is A... I tot it should be C作者: wake2000 时间: 2011-7-11 19:08
A is right. while you need to let ALL clients know and the info should go public, you shouldn't disadvantage anyone (including the wifey) just b/c she's the wifey. fair and equal treatment. obama-style if you will.作者: zwjy 时间: 2011-7-11 19:08
Could it be because the beneficial interest story only applies to the oversubscribed IPO issue?作者: canadiananalyst 时间: 2011-7-11 19:08
I don't know the details; but your point is important, I guess. If Rock is just a buy-side analyst, and not the portfolio manager of the wife's account, it sounds OK to treat her account as a regular account.作者: Roflnadal 时间: 2011-7-11 19:08
actually, i take that back. emplyer over yourself....作者: justin88 时间: 2011-7-11 19:08
gotcha CP. that was my fault.作者: bboo 时间: 2011-7-11 19:08
I think the primary determinant here is whether or not he has a beneficial interest in the account, but it's not really clear. We can only assume he does because they're married.
NO EXCUSES作者: dyga 时间: 2011-7-11 19:08
Standard 6B:
B. Priority of Transactions. Investment transactions for clients and employ- ers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.
(Level III Volume 1 Ethical and Professional Standards , 4th Edition. Pearson Learning Solutions 17).
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NO EXCUSES作者: mik82 时间: 2011-7-11 19:08
cmon guys its def A
the wife is a fee paying client of the firm......she should be treated the same as other clients......................as soon as the info is disseminated to all clients then clients can begin trading作者: thommo77 时间: 2011-7-11 19:08
Two things -
1.)it doesn't say fee paying anywhere.
2.)even if it did, i do believe that if you have a beneficial interest in the account, fee paying or not, clients and employer come first.作者: bkballa 时间: 2011-7-11 19:08
so his wife isnt a cliient?作者: Chuckrox 时间: 2011-7-11 19:09
You can 100% absolutely have pro bono accounts. In any event if you have a beneficial interest in an account, even if it's your brothers, aunts, friends, neighbors, inbred stepchild, you have to let your firm and other clients come first (even if the inbred step child pays fees).作者: NakedPuts00 时间: 2011-7-11 19:09
easy there my fellow analist
yes a client can be both fee and non fee paying
non fee paying makes it a bit more tricky actually since the standards says explicitly ( from memory so someone please feel free) that all fee paying clients are to be treated the same..............作者: former 时间: 2011-7-11 19:09
I chose A
I think the distinction here is the fact that it says in the question: "Rock’s wife has an account at Best Trade Co" indicating that she is a client, fee paying or not.
A beneficial owner only needs to wait if they are trading in a personal account - meaning not as a client of the particular research. only then would Rock need to wait.
Since the wife is a client, again fee paying or not, she is allowed to be privy to the research and therefore can trade immediately.
Continuation of BPdulog's std 6B quote:
...Family accounts that are client accounts should be traeted like any other firm account and should neither be given special treatment nor be disadvantaged because of family relationships.作者: aidebaobao 时间: 2011-7-11 19:09
Members or candidates may undertake transactions in accounts for which they are a beneficial owner only after their clients and employers have had adequate opportunity to act on a recommendation. Personal transactions include those made for the member’s or candidate’s own account, for family (including spouse, children, and other immediate family members) accounts, and for accounts in which the member or candidate has a direct or indirect pecuniary interest, such as a trust or retirement account. Family accounts that are client accounts should be treated like any other firm account and should neither be given special treatment nor be disadvantaged because of the family relationship. If a member or candidate has a beneficial ownership in the account, however, the member or candidate may be subject to preclearance or reporting require- ments of the employer or applicable law.
(Level III Volume 1 Ethical and Professional Standards , 4th Edition. Pearson Learning Solutions 132).
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