CFA Practice Question

CFA Practice Question

Brad Hartley directs portfolio trades for his clients to a brokerage firm that gives him price concessions for his personal trades. Brad does not fill out the compliance forms that required reporting of personal trades regularly. Brad knows that another broker can execute trades faster.

I. Brad has violated Standard III (A) - Loyalty, Prudence, and Care.
II. Brad's supervisor has violated Standard IV (C) - Responsibilities of Supervisors.
A. I and II.
B. I only.
C. II only.
Explanation: Brad should seek the best price and execution for his clients. There is indication that he is not doing so and is placing his own interests ahead of clients' interests, ignoring his fiduciary duty. He is in violation of Standard III (A). Brad's supervisor has also violated Standard IV (C) by not enforcing the firm's reporting requirements.

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