What is the difference between Misrepresentation, Performance Presentation and Communication with Clients and Prospective Client

[archived_user]

What is the difference between Misrepresentation, Performance Presentation and Communication with Clients and Prospective Client?
Michelieu tells a prospective client, “I may not have a long-term track record yet, but I’m sure that you’ll be very pleased with my recommendations and service. In the three years that I’ve been in the business, my equity-oriented clients have averaged a total return of more than 26% a year.” The statement is true, but Michelieu only has a few clients, and one of his clients took a large position in a penny stock (against Michelieu’s advice) and realized a huge gain. This large return caused the average of all of Michelieu’s clients to exceed 26% a year. Without this one investment, the average gain would have been 8% a year.
What is the violation here? I think it may be performance presentation because it tells about his past performance. I also think it may be communication with clients and prospective client because it is a conversation between him and his prospective client. But the answer is misrepresentation.

 

[archived_user]

He misrepresented the returns by misleading

 

[archived_user]

Return is performance……..

 

[archived_user]

It’s clearly not Communication with Clients. As for the other two,
By definition:
Standard I(C) Misrepresentation
A misrepresentation is any untrue statement or omission of a fact or any statement that is otherwise false or misleading.

Standard III(D) Performance Presentation covers any practice that would lead to misrepresentation of a member’s or candidate’s performance record, whether the practice involves performance presentation or performance measurement.

Since Performance Presentation has broader scope, they might expect Misrepresentation as the answer.