Question #29
Reading: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV
PDF File: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV.pdf
Page: 12
Status: Incorrect
Correct Answer: A
Your Answer: C
Question
Which of the following statements is most accurate about the Standard concerning the responsibilities of supervisors?
Answer Choices:
A. If a subordinate violates a securities law, her supervisor is in violation of the Standard
B. If a supervisor makes a reasonable effort to detect violations, but fails to detect a violation that occurs, she has violated the Standard
C. If a supervisor does not make a reasonable effort to detect violations, she is in violation of the Standard even if no violations by her subordinates have occurred
Explanation
Standard IV(C) Responsibilities of Supervisors requires members to make a reasonable
effort to detect and prevent violations by their subordinates of applicable laws,
regulations, and rules. Violations by subordinates do not necessarily mean the supervisor
has violated this Standard if the supervisor has made reasonable efforts to detect and
prevent violations
(Module 42.7, LOS 42: IV(C))