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Basic Question 1 of 5
George Moses, CFA, follows Technicorp as an analyst for a brokerage company. Extensive study has led Moses to rate Technicorp as a "sell", largely because of increasing competition in the industry. At a recent CFA Institute's society meeting, Moses discussed Technicorp's prospects with two other analysts who also follow the company. Although the other analysts did not say why, both said that Technicorp was about to experience rapid earnings growth. Upon returning to his office, Moses released a "buy" recommendation based on this new information. Moses was in ______.
B. violation of CFA Institute's Standards because he did not seek approval of the change from his supervisor
C. violation of CFA Institute's Standards because he did not have a reasonable and adequate basis for his recommendation
A. violation of CFA Institute's Standards because he copied the opinions of others
B. violation of CFA Institute's Standards because he did not seek approval of the change from his supervisor
C. violation of CFA Institute's Standards because he did not have a reasonable and adequate basis for his recommendation
User Contributed Comments 4
| User | Comment |
|---|---|
| dipta | The critical clue is that the other analysts did nt say "WHY". Had they said so, then Moses would have had the obligation to disclose that the fact and opinion belonged to someone else - plagiarism |
| snider | but he does not have any responsibility to do so: i.e. encourage his friend to disclose the info. |
| johntan1979 | What if the other 2 analysts did their own respective extensive research and diligence and then rate it as a BUY? Will Moses be in violation by switching from SELL to BUY? |
| raffrobb | Members and Candidates MUST check 2nd and 3rd party research too. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct
identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards
CFA® 2024 Level I Curriculum, Volume 6, Module 3.