CFA Practice Question
Courtney Jackson manages pension portfolios for several corporations. In a conversation with the CFO of Mayberry Confectionaires, she comes to know that Mayberry's contributions to their defined benefit pension plan violated the government's watchdog agency's rules. It is a serious violation and the CFO informs Courtney that they are being investigated by the agency's inspector. A few days later, Courtney gets a call from the inspector to seek information about the contributions made to the pension plan and its performance. Courtney
A. should discuss the matter and cooperate with the inspector without any preconditions.
B. may discuss the matter with the inspector only under a court order.
C. may discuss the matter with the inspector only after getting authorization from the plan sponsor and the plan's trustees.
Explanation: Courtney should not invoke the Standard III (E) - Preservation of Confidentiality, because in legal and serious violations of regulations, client confidentiality does not apply. The standards permit a member to co-operate with investigations such as this.
User Contributed Comments 7
| User | Comment |
|---|---|
| colinn | Brutal ethics section... |
| johnmullrooney | yeah, that was a lot tougher than other exams |
| pepper | i don't agree to the answer. there should be a court order, at least in my country. this is to prevent abuse by the investigating branch. |
| cjpatel | ya Brutal! for sure..im guessing they can just about throw anything at us, these one can really make up tonnes of scenarios. Every Ethics question i do it seems like all the answers are CORRECT!!! Does anyone else feel the same way?? |
| arudkov | 2 pepper - So do I. We should ask about order. Or answer A means we should tell everything to any authority representative - even car police. |
| indrayudha | Other than court order, I thought only CFA Institute own committee are privy to confidential customer info (CFA Inst argues that it will uphold the confidentiality themselves). |
| mjwoulf | Agreed - I bombed this ethics section for sure. You really have to read between the lines on these questions... |