Reading 1: Code of Ethics and Standards of Professional Condu 2011, face, structure, process, center

1215

Session 1: Ethical 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 process for the enforcement of the Code and Standards.

 

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) Both of the results listed here.

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

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

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Both of these are reasons that CFA Institute may use for summarily suspending use of the CFA designation.

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1215

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

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

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

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

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This is from page ix of the Standards of Practice Handbook. Complaints may be filed by anyone and are to be written to the Professional Conduct Program staff.

1215

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) Private censure.

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

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CFA Institute does not impose fines. All of the other choices are possible sanctions. CFA Institute may suspend a candidate from further participation in the CFA program.

1215

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.

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Public censure is less severe than suspension from using the CFA designation, and suspension is less severe than revocation.

1215

A covered person who rejects a stipulation agreement:

A) may request an appeal to a hearing panel.

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

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

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A covered person who rejects a proposed stipulation agreement may request an appeal to a hearing panel. This must be done in 30 days, or the matter will be referred automatically if no action is taken. A stipulation agreement is not relevant to a case warranting a summary suspension.

1215

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) could be summarily suspended from membership.

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

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

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Refusing to cooperate with a CFA Institute investigation of a member’s behavior could lead to suspension of membership. If the member has earned the right to use the CFA designation, the punishment could be suspension of use of the designation.

1215

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) Disbarment under securities laws.

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

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A single misdemeanor conviction for possession of illegal narcotics is not grounds for a summary suspension.