CFA Practice Question
Sundar Mohan maintains many internet web sites. In return for cash payment, Mohan provides publicity to XOT Corp. The websites describe the various products of XOT Corp, and also provide the ticker symbol for XOT stock. The payments received by Mohan from XOT are not disclosed.
A. Mohan has violated both Standard IV (B) Additional Compensation Arrangements and Standard V (A) Diligence and Reasonable Basis.
B. Mohan has only violated Standard IV (B) Additional Compensation Arrangements.
C. Mohan has not violated the Standards.
Explanation: No recommendation to buy stock has been made, nor any forecast about future prospects of the firm etc.
User Contributed Comments 6
| User | Comment |
|---|---|
| chandsingh | what about compensation arrangements not being disclosed to the employer? does it matter whether the work is unrelated? |
| Mikehuynh | Mohan simply maintains the website of XOT Corp without recommendation to buy stock or anything else. So that's ok. Since the question did not mention anything about his employer, better not assume. |
| dream007 | of course it mentions employer. Payments received are not disclosed... |
| jjhigdon | Payments are not disclosed to readers of the site - no assumption of an employer. In fact, since it says he maintains many internet sites, it is more or less implies this is his primary employment. |
| harrybay | Disclosure in only required when making a recommendation. |
| Scc0813 | Disclosure is needed when the activities may conflict with your responsibilities as an employee, or your doing a job that is also offered by your employer. |