2024 CFA Level I Exam: CFA Discussion Topic: A CFA ethics question: can he accept the gift?

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Topic: A CFA ethics question: can he accept the gift?

Author	Topic: A CFA ethics question: can he accept the gift?
famo @2017-11-12 16:49:06	I have a question in the following question: Q10, Kim, CFA is a research analyst for Batts Brothers an investment banking firm in NY. Kim follows the energy industry and has frequent contact with industry executives. A CEO of a large oil and gas firm that has previously employed Batts Brothers to underwrite stock issues has invited Kim to his office to discuss the secondary offering of the company's stock. The CEO wants Batts Brother to underwrite the company's stock issue. As an incentive to place the issue quickly with institutional investor. The CEO offers Kim the opportunities to fly on his private jet for an exotic game haunting if Kim's firm can complete the underwriting within a month. According to CFA standard and code. A) must not accept such lavish benefit in order to maintain his objectivity B) must obtain written consent from Batts brother before accepting C) may accept the invitation without consent only if he discloses the trip to Batts brother before accepting. The answer is B. But i think in this situation, the extra benefit has nothing to do with his work, is a luxury holiday and he shouldn't accept it even with consent from employer? Please share your thoughts.
worried @2017-11-23 23:57:10	I think the point being driven home is that any benefits must receive written permission from the employer before being accepted, whether it's big game hunting, hotel accomodations or lunch at an upscale restaurant. I haven't come across a question yet that's reached the limits of lavish benefits if permission is granted by the employer. Now if accepting the benefit conflicts with another standard, even if written permission is received that would be a different story.

Author

Topic: A CFA ethics question: can he accept the gift?

famo
@2017-11-12 16:49:06

I have a question in the following question:

Q10, Kim, CFA is a research analyst for Batts Brothers an investment banking firm in NY. Kim follows the energy industry and has frequent contact with industry executives. A CEO of a large oil and gas firm that has previously employed Batts Brothers to underwrite stock issues has invited Kim to his office to discuss the secondary offering of the company's stock. The CEO wants Batts Brother to underwrite the company's stock issue. As an incentive to place the issue quickly with institutional investor. The CEO offers Kim the opportunities to fly on his private jet for an exotic game haunting if Kim's firm can complete the underwriting within a month. According to CFA standard and code.

A) must not accept such lavish benefit in order to maintain his objectivity
B) must obtain written consent from Batts brother before accepting
C) may accept the invitation without consent only if he discloses the trip to Batts brother before accepting.

The answer is B. But i think in this situation, the extra benefit has nothing to do with his work, is a luxury holiday and he shouldn't accept it even with consent from employer? Please share your thoughts.

worried
@2017-11-23 23:57:10

I think the point being driven home is that any benefits must receive written permission from the employer before being accepted, whether it's big game hunting, hotel accomodations or lunch at an upscale restaurant. I haven't come across a question yet that's reached the limits of lavish benefits if permission is granted by the employer.

Now if accepting the benefit conflicts with another standard, even if written permission is received that would be a different story.

CFA Discussion Topic: A CFA ethics question: can he accept the gift?

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CFA Discussion Topic: A CFA ethics question: can he accept the gift?

Martin Rockenfeldt