Andrew Walker, CFA, is the CIO for Hamilton Trust (HT), an investment advisor. Walker recently assigned one of his portfolio managers, Nolan Brown, to manage several accounts that primarily invest in thinly traded micro-cap stocks. Walker soon notices that Brown places many stock trades for these accounts on the last day of the month, towards the market's close. Walker finds this trading activity unusual and speaks to Brown, who explains that the trading activity was completed at a client's request. Walker does not investigate further. Six months later, regulatory authorities sanction HT for manipulating micro-cap stock prices at month end in order to boost account values. Did Walker violate any CFA Institute Standards of Professional Conduct?

Explanation: The CFA Institute Standard on Responsibilities of Supervisors requires members or candidates to take steps to detect and prevent violations of laws, rules, and regulations. Walker failed in his supervisory role when he accepted Brown's explanation of the unusual trading activity. Walker should have reviewed the client's goals, objectives, and records to see if he or she in fact requested month-end trading. Regardless of the explanation provided by Brown, Walker should have investigated further.