Question #38
Reading: Reading 42.1 Standards of Professional Conduct Guidance for Standards I
PDF File: Reading 42.1 Standards of Professional Conduct Guidance for Standards I.pdf
Page: 15
Status: Correct
Correct Answer: A
Question
Jane Dawson, CFA, an analyst at a New York brokerage firm, suspects that Bob Boatman, CFA, another analyst at the same firm, has violated a state securities law. According to the CFA Institute Standards of Professional Conduct, Dawson is:
Answer Choices:
A. required to report the suspected violation to CFA Institute
B. required to report the suspected violation to the appropriate state regulatory agency
C. NOT required to report the violation to the appropriate governmental or regulatory organizations
Explanation
The Code and Standards do not require that members report legal violations to the
appropriate governmental or regulatory organizations, but such disclosure may be
prudent in certain circumstances. Dawson should consult legal counsel and disassociate
from the activity.
(Module 42.1, LOS 42: I(A))