Schweser Volume 1 Exam 2 Question 65 investment, performed, determine, before, making

meghanjackson

An investment adviser buys a hot IPO for himself and one client. He made the recommendation before he performed his own due diligence and didn't determine suitability.

The answer confirms that suitability and diligence/basis are violated but implies that fair dealing was not violated in making the recommendation. How is this not a violation of fair dealing?

I would think that fair dealing is violated in three ways: a) making a recommendation to one client before it is distributed widely b) making the recommendation to only one client c) getting in on an oversubscribed ipo for his own account.



Edited 2 time(s). Last edit at Sunday, May 30, 2010 at 04:32PM by Ceredwyn.