Question #24 - Reading 42.3 Standards of Professional Conduct Guidance for Standards III

Reading: Reading 42.3 Standards of Professional Conduct Guidance for Standards III

PDF File: Reading 42.3 Standards of Professional Conduct Guidance for Standards III.pdf

Page: 10

Status: Incorrect

Correct Answer: A

Your Answer: C

Question

When a firm seeks to allocate a disproportionate number of shares of a hot IPO to performance-based fee accounts this constitutes a violation of the Standard concerning:

Answer Choices:

A. fiduciary duty

B. priority of transactions

C. additional compensation arrangements

Explanation

The allocation of a disproportionate number of shares to performance-based fee accounts constitutes a violation of fiduciary duty, in addition to being a violation of the Standard concerning fair dealing. (Module 42.4, LOS 42: III(A))

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