1 ethics question colleagues, attention, execution, question, manager

hardwork24

Terry Welch, CFA, is a portfolio manager for Barr investments. Welch began using ORH Brokers as his sole broker five years ago. ORH’s competitive fees and superior trade execution have drawn the attention of Welch’s colleagues, many of whom now only use ORH to place trades. In appreciation for the long-standing relationship, ORH offers Welch tickets to a performance of the local symphony, which he accepts. The tickets have a total value of $90. Welch elects not to report the gift to his employer since it does not meet Barr’s reportable threshold value of $100. Do Welch’s actions with regards to the symphony tickets violate any CFA Institute Standards of Professional Conduct?
A. No violation.
B. Welch is permitted to accept the tickets, however in this instance, written permission is required from the employer.
C. Welch is in violation of the Standards.
What is your answer and WHY?
Thanks

chunty

esco Wrote:
——————————————————-
> Do you need to disclose something that is a token
> gift, i.e. less than $100? I’m pretty sure I read
> somewhere that you have to disclose no matter the
> value in consideration, anyone confirm?
that is exactly what i believed till now. anywayz i send a service request to CFAI on this issue. hope they clear the thing.

mp3bu

Do you need to disclose something that is a token gift, i.e. less than $100? I’m pretty sure I read somewhere that you have to disclose no matter the value in consideration, anyone confirm?

bbtomato

*Btw Secret Sauce also mentions that ‘you can accept gifts from clients as long as properly disclosed’. However in Qbank they mentioned multiple times that token gifts need not be disclosed.

IAmNeil

Thanks ‘dewey’ for your reply. The reason I am digging deep is because, I have this feeling that Schweser is not always correct. In that case the only way to be sure is by following the SPC Handbook. I went through all the examples to find a relevant example but couldn’t get one. The only option to get confirmed is if the SPC clearly states something like this, that for token gift no disclosure is required. For those gifts or bonuses that might compete with the employers interest or create a conflict of interest the MEMBER/CANDIDATE must get written consent. This much is sure. But for ‘token’ gifts not even a disclosure required?
Did anyone come across such a question in the CFAI mocks?

onelife1

A). Standards I-B~Becouse it is under $100, if it were over then it would need to be diclosed to mgmt.

giorgio10

I think people when are not sure of the question go to the most conservative answer (i.e in violation ) i think in ethics it works in the opposite side

malbec

I also would have went with A. Excellent question esco, point well taken. Long standing relationship + relatively small value = ok according to CFAI institute. Uh oh, I made a blanket statement about ethics……run to the hills.

segalm

Good question.
Thank you esco

d2rockstar

Here is their explanation
A) Standard 1(B), according to the Standard, members must maintain independence and objectivity with regard to their professional duties. Members must not accept any gift that may compromise their independence and objectivity. Because Welch has had a long-standing relationship with ORH brokers, the symphony tickets have relatively small value, and because ORH provides superior execution at competitive commission rates, it is unlikely that the symphony tickets will influence Welch’s independence and objectivity. Therefore it is acceptable for Welch to take the tickets without any disclosure. Modest gifts are OK and no disclosure is required.