CFA CFA Level 3 Question of the Week: Level 3 – Ethics

Question of the Week: Level 3 – Ethics

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    • MarkMeldrum
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      Roger Linstrom is a financial advisor with Perón & Co. and is well respected in his community.  A local children’s charity has asked him to speak at one of their fundraisers.  The director of the charity made it clear to Linstrom that, although only about 65% of the money donated goes directly to help the children, he would appreciate it if Linstrom said that the percentage is “about 90%”.  If Linstrom complies with the director’s request, Linstrom will most likely have:

      • A. violated Standard I(D) Misconduct.
      • B. not violated Standard I(D) because the charity work is not related to
        his profession as a financial advisor.
      • C. not violated Standard I(D) because both “about 90%” and “directly
        helping the children” are vague and open to interpretation.
    • MarkMeldrum
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      The correct answer is Option A.

      If Linstrom makes the statement that the amount is about 90% when he knows it to be 65% – especially with the intent to increase donations of money – his statement if fraudulent, and may well be illegal.  Such actions compromise his integrity, which is a violation of Standard I(D).

      Note that the fraud does not have to be related to his profession.

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