CFA 2018 level 3 schweser practice exam CFA 2018 level 3 question bank 01 ethics question

ETHICS THIS QUESTION HAS SIX PARTS FOR A TOTAL OF 18 MINUTES Art Anderson, CFA, is a junior consultant at a small investment advisory firm Following his second visit to a potential client, Mrs Peterson, Anderson mailed Peterson a personal data form to complete and return The purpose of the form was to gather information about Peterson’s financial situation, investment experience, and investment objectives Upon receiving the completed form in the mail, Anderson had his assistant prepare a typed version of the document Anderson then reviewed the information before calling Peterson to clarify several items During the phone conversation, Peterson stated that it is extremely important that the information she is providing to Anderson be considered confidential for several reasons First, as a result of a lawsuit from a former neighbor, Peterson needs to hide some assets to avoid paying a judgment Therefore, she wants to open up two separate accounts: a small one in her name and a second account in the name of the company that Peterson owns Second, Peterson told Anderson that she is about to file for divorce from her husband and does not want her husband to know about the accounts Before ending the conversation, Peterson asked if Anderson was still confident in his recommendation to buy shares of Brown Company stock Anderson assured Peterson that this was a good idea Peterson does not know that Anderson bought 1,000 shares of the stock for his own account three years earlier After collecting all the information he needed, Anderson visited with his supervisor to ask advice about opening the account in the name of Peterson’s company The supervisor told Anderson that Peterson should open the account in the name of a fictitious company instead of using the name of Peterson’s company This would make it more difficult for the courts to find the assets However, the supervisor stated, “Opening an account in the name of a fictitious firm is illegal so I cannot suggest that you it I am only saying that, if you did this, it would help Peterson accomplish her objective.” Later that day, Anderson went to a restaurant and met his old college roommate, Doug White, who is now a divorce attorney Anderson told White all about Peterson’s situation and suggested that if White needs a new client, he should contact Peterson, who is about to divorce her husband White thanked Anderson for the lead but said that he currently had more clients than he could handle A Did Anderson violate the Code and Standards by telling White about Peterson’s impending divorce? Justify your response with one reason (3 minutes) B Did Anderson violate the Code and Standards by the way he gathered information from Peterson using the personal data form? Justify your response with one reason (3 minutes) C Did Anderson violate the Code and Standards when he suggested that Peterson buy shares of Brown Company stock when Anderson already owns shares? Justify your response with one reason (3 minutes) D Did Anderson’s supervisor violate the Code and Standards when he told Anderson about a more effective way to hide assets? Justify your response with one reason (3 minutes) E If Anderson’s employer is not a member of the CFA Institute, what action is required of Anderson under the CFA Institute’s Standards of Professional Conduct? What other actions should Anderson consider taking? (3 minutes) F Is Anderson in violation of the Code and Standards if he informs the legal authorities that Peterson is attempting to hide assets from the courts? Justify your response with one reason (3 minutes) ... member of the CFA Institute, what action is required of Anderson under the CFA Institute’s Standards of Professional Conduct? What other actions should Anderson consider taking? (3 minutes) F... reason (3 minutes) D Did Anderson’s supervisor violate the Code and Standards when he told Anderson about a more effective way to hide assets? Justify your response with one reason (3 minutes)... information from Peterson using the personal data form? Justify your response with one reason (3 minutes) C Did Anderson violate the Code and Standards when he suggested that Peterson buy shares