CFA CFA Level 2 Question of the Week: Level 2 – Ethics

Question of the Week: Level 2 – Ethics

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    • MarkMeldrum
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      Mary Lee works in a country whose laws require that all financial records be destroyed six years after the initial transaction.  Lee keeps all financial records for seven years, then destroys them.  Lee has most likely:

      • violated Standard V(C) Record Retention.
      • violated Standard I(A) Knowledge of the Law.
      • not violated CFA Institute Standards of Professional Conduct.
    • MarkMeldrum
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      CFA Institute Standards of Professional Conduct require Lee to obey the law, and, here, she violated the law by retaining records beyond the 6-year limit allowed by statute.

      Lee has not violated Standard V(C) because there is no requirement to retain records for seven years, and CFA Institute’s recommendation to retain records for seven years applies only in the absence of regulatory guidance or firm policy.  Here, regulations require destroying the records after 6 years.

    • fabian
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      Lee has not violated Standard V(C) because there is no requirement to retain records for seven years, and CFA Institute’s recommendation to retain records for seven years applies only in the absence of regulatory guidance or firm policy.  Here, regulations require destroying the records after 6 years.

      Even if there was a requirement to retain records for seven years, Lee would not have violated standard V(C), correct? Since there is a rule that the letter of the law trumps the Standards?

    • dollface
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      CFA Institute Standards of Professional Conduct require Lee to obey the law, and, here, she violated the law by retaining records beyond the 6-year limit allowed by statute.

      Lee has not violated Standard V(C) because there is no requirement to retain records for seven years, and CFA Institute’s recommendation to retain records for seven years applies only in the absence of regulatory guidance or firm policy.  Here, regulations require destroying the records after 6 years.

      So is the answer B or C?

    • MarkMeldrum
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      The correct answer is Option B.

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