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“Janet Jackson was recently hired as the new compliance officer of Long Beach Securities. Upon orientation of the firm, she learns that the head of research is also responsible for the junior analysts that work in the corporate finance department. Which Standards would be susceptible to violation given this situation?
A) Standard I-D, Misconduct
B) Standard II-A, Material Nonpublic Information
C) Standard IV-C, Responsibilities of Supervisors
D) Standard I-B, Independence and Objectivity
The Right Answer is b. You skipped this question.
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Explanation:
Standard II-A, Material Nonpublic Information, discusses the need for “firewalls” in order to keep sensitive information secure. Corporate finance personnel are deemed as “temporary insiders”, with any information they may gain in the course of their duties required to be kept strictly confidential, even from the analytical department of the same firm. For Janet to build an effective “firewall”, there must not be an overlap of personnel or supervisory scope across these two very different departments”
Have found this ques on investopedia. why is Option D incorrect?