标题: Ethics Question need explanation [打印本页] 作者: dotamasta 时间: 2013-4-7 06:07 标题: Ethics Question need explanation
Hi Guys,
Putting here one Ethics question, Please explain the correct answer…
Jack Schleifer, CFA, is an analyst for Brown Investment Managers (BIM).
Schleifer has recenrly accepted an invitation ro visit the facilities of ChemCo, a
producer of chemical compounds used in a variety of indusrries. ChemCo offers
ro pay for Schleifer’s accommodations in a penthouse suitc at a luxury hotel and
allow Schleifer ro use the firm’s private jet ro rrave! ro its three facilities located
in New York, Hong Kong, and London. In addition, ChemCo offers rwo tickets
ro a formal highsociety dinner in New York and a small desk clock with the
ChemCo logo. Schleifer declines to use ChemCo’s corporate jet or ro allow the
firm ro pay for his accommodations but accepts the clock and the tickets ro the
dinner (which he discloses ro his employer) since he will be able ro market his
firm’s mutual funds ro other guests at the dinner. Has Schleifer violated any CFA
Institute Standards of Professional Conduct?
A. Yes.
B. No, since he is using the gifts accepted ro benefit his employer’s interests.
C. No, since the gifts he accepted were fully disclosed in writing ro his
employer.作者: Chuckrox8 时间: 2013-4-7 06:08
I think it’s A. By accepting tickets to the high society dinner (regardless of disclosure) he has violated CFAI Standards. I could be wrong on this one but I think that it could become a conflict of interest if you go to the dinner on another company’s dime which is a violation of the standards. I think about it like this: if ChemCo pays for this dinner, in return they may expect a good report. If you put yourself in a position where your independence may be compromised, you are violating the code. Anyone else agree with me?作者: OmarAdnan 时间: 2013-4-7 06:09
It’s either A or C. I think the key here is whether the clock and the dinner could reasonably be expected to interfere with the analyst’s independence and objectivity.
I’d go with C. The clock definitely is okay to accept. The dinner is the tricky part. I think as long as he disclosed it to his employer and in any reports he writes he’s okay.作者: Iginla2010 时间: 2013-4-7 06:09
Did someone replace your “r” key with the “t” key??
I think it’s C because of disclosure.
Btw, superstitious people would be angry if you gave them a clock for a present.作者: mkytz15 时间: 2013-4-7 06:11
Sticking with A, make sure that you remember that you aren’t using this in reallife situations many times. These are all hypothetical and they are black and white. If CFA says expensive tickets may sway your judgment, even if you know that your own personal judgment would not be swayed by these tickets, you have to say it is a violation. Whether or not that is the case in the real world doesn’t make a difference on this exam. I saw someone’s post recently that said something to the extent of “forget what you see analysts do on a daily basis and only think of it from the lens of the CFAI until this exam is over.”作者: pawn 时间: 2013-4-7 06:12
I remember this from the book. The answer is A.
You can’t accept any gift that might reasonably affect your independence or objectivity regardless of the reason or if you disclose.作者: burnsy562000 时间: 2013-4-7 06:14
revenant
the quote you gave is correct. However, it applies for gift from CLIENTS, where standard is more linient since gift from clients can be as part of compensation.
Chemco is not a client, but a corporation wanting to have favorable coverage so the bar is set much higher. Agree with job71188 and CzarHC for their arguments –answer A作者: spartan1 时间: 2013-4-7 06:15
Don’t confuse gifts from entities with gifts from clients.
If you are getting a gift from a company you are analyzing be more strict with the rule regarding gifts. If the gift is from a client, you disclose it as additional comp so the employer can judge the effect.作者: dandman 时间: 2013-4-7 06:17
The employer can force him to go, but either Schleifer or BIM would have to pay for it to remain within the code and standards.作者: nixie24 时间: 2013-4-7 06:18
after all this discussion I guess even if employer force him still it is violation because even in that case his research would not be independent for the investor point of view and it will be biased and we know that clients interest are on first priority than employer of self interest.
Am I true ?
