Examples of Standards (1)
Today, we show review 2 concepts in
the Standards of Professional Conducts.
- Susan and her boyfriend are both taking CFA Level 1. They
studied together for 5 months every night for the exam. Her boyfriend is a
very smart guy and no one will doubt he will pass the exam. However, the
night before the exam, he was so nervous that he asked Susan to bring the
cell phones into the exam room, so that they can text message each other
in case he forgot certain equations. In order to comfort him, Susan
consented and did not submit her cell phone to the proctor before the
exam. However, Susan decided not to turn on the phone because she knew her
boyfriend didn’t need her help at all as he’s very smart. Did
Susan violate the Standards?
Yes. It is
because she did not submit the cell phone to the proctor before the exam. Moreover,
since she has conspired with her boyfriend to cheat during the exam, even
though she did not do that eventually, she already violated as she has intended
to do that.
Remember:
Having intention is enough to violate the Standards!
- John works in Country A while
resides in Country B. According to the law in Country B, a portfolio
manager cannot trade on material non-public information only if the
manager resides in Country B. In Country A, it also requires its residents
to follow the laws of the country in which they work. If John trade on
material non-public information, has he violated the Standards?
Yes, this is
because the Standards disallowed anyone to trade on material non-public
information.
Remember,
when the Standards and the laws are different, follow whichever stricter.
[...] Examples of Standards (1) [...]
For the 2nd question it should be mentioned that even if both countries would allow dealing on material non-public information John, given that he is a CFA member or candidate, must adhere to the code of conduct and thus is not allowed to trade on material nonpublic information.