Ethics hmm

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frangoya

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Joe Koban is an independent contractor who writes research reports for several investment publications. Koban refuses to sign contracts with exclusivity clauses and sometimes revises work he submits to one publication and sends slightly altered versions of the report to additional publications. Does he violate any CFA Institute Standards?
A. No
B. Loyalty
C. Additional Compensation
D. Disclosure of conflicts

I was thinking No, because he never signed exclusivity clauses...
 
I don't think that's right though.. something about member's duties in contracting relationship governed by agreement between member and client, and members need to abide by agreement. Even though there's sort of a lack of agreement here, the member should still exercise loyalty? I'm very confused. This question's from the CFAI mock by the way.
 
I think A as well.

It's freelance. You can sell it to anyone in any form. However, if he were paid by a company to write a report for them, and he then sold it to other's in a slightly modified form, that would be a violation.

BTW -- post 'MOCK EXAM' in the title is posting questions from tests. Not everyone has taken them yet.
 
He doesn't owe any loyalty to anyone, he didn't sign exclusivity rights to the people he sold his research to, meaning he can do anything he wants with it.
 
I marked B. I think its from mocks. Can you please tell me what question number is this ? In scored poorly on ethics in first mock
 
the mock is so confusing. It only tells you your score but not where you got wrong, they don't even tell you the multiple choice answers, just really confusing answers for questions like this one. I think it's q 17, or 18. Only got the question down.
 
If the first publication pays for it, the report should be the property of the publication.
I will say B.
 
But it doesn't say he writes it on commission... he just writes it. There's really too little information to make the correct call.
 
mcf Wrote:
-------------------------------------------------------
> But it doesn't say he writes it on commission...
> he just writes it. There's really too little
> information to make the correct call.

he's an independent contractor
 
Do you think there is a breach of the duty to deal fairly and objectively with all clients when providing investment analysis and making investment recommendations? I'm referring when he revises work he submits to one publication and sends slightly altered versions of the report to additional publications.
 
There's a similar scenario on Pg. 87 of the Standards and Practices Handbook. Bascially it says you are free to use the report freely but you must allow the original client to use it aka act on it before providing it to the next client. Its not very clear here but based on the question I would go with B.
 
I've noticed the difference between the q on mock and q in the curriculum. There's no exclusivity in both examples. But here he writes for investment publication and NOT violates the Standards while in the book analyst writes a research for a firm, gets a flat fee and VIOLATES the Std.

So it's about the nature of the employer and compensation?
 
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