Question #14
Reading: Reading 42.2 Standards of Professional Conduct Guidance for Standards II
PDF File: Reading 42.2 Standards of Professional Conduct Guidance for Standards II.pdf
Page: 9
Status: Correct
Correct Answer: A
Question
Don Benjamin, CFA, is the compliance officer for a large brokerage firm. He wants to prevent the communication of material nonpublic information and other sensitive information from his firm's investment banking and corporate finance departments to its sales and research departments. The most common and widespread approach that Benjamin can use to prevent insider trading by employees is the:
Answer Choices:
A. legal list
B. fire wall
C. Wall Street Rule
Explanation
To comply with Standard II(A), a fire wall provides an information barrier that prevents
communication of material nonpublic information and other sensitive information from
one department to another within a firm.
(Module 42.3, LOS 42: II(A))