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Conflicts of Interest

  • Disclosure of conflicts: Full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity.
     
  • Priority of transaction: Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.
     
  • Referral Fees: Disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration received.

Q:

Mr. Aditya Sarkar, CFA who covers Shivam Computers, came to know about the fraud in Co. through his personal sources, upon which he decides to sell his personal shares immediately. Is Mr. Sarkar in violation of CFA standards of professional conduct?
 

Ans:

Mr. Sarkar has not only violated Standard VI(B) by giving preference to his personal transaction over the clients' & employers' but also violated Standard II(A) by acting on the material non-public information.
 

Q:

Members and candidates must disclose their employer and clients any consideration or benefit received for the recommendation of products or services. Members must adhere to this guideline in order to comply with:
 

Ans:

The correct answer is Standard VI(C) Referral fees

 





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