CFA Practice Question

CFA Practice Question

Melanie Jones, a money manager, received a gift of significant value from a client as a reward for her performance in the prior period. Melanie does keep the gift, but notifies her employer. Is this an ethical violation?
A. No. As long as Melanie notifies her employer, she can receive gifts for any reason.
B. No. As long as Melanie notifies her employer and the gifts are for the prior period and not contingent on future performance or client benefit, this is not an ethical violation.
C. Yes. Melanie should not be receiving gifts of significant value from clients.
Explanation: No that's not ethical violation. As long as Melanie notifies her employer and the gifts are for the prior period and not contingent on future performance or client benefit, this is not an ethical violation.

User Contributed Comments 2

User Comment
mary11 I am not sure what it matters if it was for the prior period or not.... I thought in general you have to notify your employeer BEFORE you accept the gift - there have been plenty of examples where the gift was based on the fact that they recieved a certain percentage of return on the investments.
GBolt93 if it's for future performance then you have incentive to favor that client.
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