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- Topic: Tricky question on Ethics
| Author | Topic: Tricky question on Ethics |
|---|---|
| lovefirst @2018-11-01 17:37:49 |
Frank is the top institutional salesman at Dewey. He has many active outside interests . Which of the following must he disclose to his employeer? a. A set on the Board of Directors of a small, private biotech firm. b. Ownership of 200 shares of IBM. c. None of the above. The answer to this didn't seem obvious to me and after having a group discussion we seem to lean toward different explanations and still not convinced on what's the best reasoning for the answer. Let me know, what is your answer choice and short explanation why. Your feedback is really appreciated. |
| bbandt @2018-11-04 06:11:10 |
The answer is C. Participation in the outside board of directors need not be disclosed since the firm is private. And owning 200 shared does not represent material ownership of securities. |
| securities @2018-11-09 16:23:48 |
I guess my question is why does a company being private differ? If he's an CFAI member, shouldn't the ethics rules apply regardless of the nature of the company? I don't recall any differentiation between public/private in the Ethics book but I suppose I'll have to double-check. Also, why is the share ownership immaterial? What would constitute material ownership. |
