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John Green, CFA, is a sell-side technology analyst at Federal Securities, a large global investment banking and advisory firm. In many of his recent conversations with executives at the firms he researches, Green has heard disturbing news. Most of these firms are lowering sales estimates for the coming year. However, the stock prices have been stable despite management's widely disseminated sales warnings. Green is preparing his quarterly industry analysis and decides to seek further input. He calls Alan Volk, CFA, a close friend who runs the Initial Public Offering section of the investment banking department of Federal Securities.
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After carefully evaluating Federal's largest institutional client's portfolio, Green contacts the client and recommends selling all of his existing technology stocks and buying two of the upcoming IPOs, similar to the recommendation given to Federal's portfolio managers. Green's research has allowed him to conclude that only these two IPOs would be appropriate for this particular client's portfolio. Investing in these IPOs and selling the current technology holdings would, according to Green, "double the returns that your portfolio experienced last year." Federal Securities has recently hired Dirks Bentley, a CFA candidate who has passed Level 2 and is currently preparing to take the Level 3 CFA® exam, to reorganize Federal's compliance department.
Bentley tells Green that he may be subject to CFA Institute sanctions due to inappropriate contact between analysts and investment bankers within Federal Securities. Bentley has recommended that Green implement a firewall to rectify the situation and has outlined the key characteristics for such a system.
Bentley's suggestions are as follows:
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2. All beneficial ownership, whether direct or indirect, of recommended securities must be disclosed in writing.
3. The firm must increase the level of review or restriction of proprietary trading activities during periods in which the firm has knowledge of information that is both material and nonpublic.
Bentley has identified two of Green's analysts, neither of whom have non-compete contracts, who are preparing to leave Federal Securities and go into competition. The first employee, James Ybarra, CFA, has agreed to take a position with one of Federal's direct competitors. Ybarra has contacted existing Federal clients using a client list he created with public records. None of the contacted clients have agreed to move their accounts as Ybarra has requested. The second employee, Martha Cliff, CFA, has registered the name Cliff Investment Consulting (CIC), which she plans to use for her independent consulting business.
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After discussing the departing analysts. Green asks Bentley how to best handle the disclosure of the following items: (1) although not currently a board member. Green has served in the past on the board of directors of a company he researches and expects that he will do so again in the near future; and (2) Green recently inherited put options on a company for which he has an outstanding buy recommendation.
Bentley is contemplating his response to Green.
Which of BentJey's recommendations regarding the key characteristics of a firewall are inconsistent with those recommended by CFA Institute Standards of Professional Conduct?
A. Characteristic 3.
B. Characteristic 1.
C. Characteristic 2.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
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(Study Session 1, LOS 2.a)
NEW QUESTION: 2
An inborn error of metabolism that causes premature destruction of RBC:
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B. G6PD
C. Celiac Disease
D. Phenylketonuria
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Explanation:
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NEW QUESTION: 3
The SSL VPN implementation on a Cisco ASA adaptive security appliance supports which three of these features?
(Choose three)
A. establishing a Winsock 2 connection between the client and the server through port forwarding
B. sending TCP-only traffic through port forwarding
C. establishing a Winsock 2 connection between the client and the server through smart tunnels
D. sending TCP and UDP traffic through a smart tunnel
E. sending TCP and UDP traffic through port forwarding
F. sending TCP-only traffic through a smart tunnel
Answer: B,C,F
Explanation:
http://www.cisco.com/c/dam/en/us/solutions/collateral/enterprise/design-zone-security/tunnel.pdf
NEW QUESTION: 4
You manage an Office 365 tenant that uses an Enterprise E1 subscription.
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E. Set-MailboxJunkEmailConfiguration
F. Set-CsUser
G. Enable-JournalRule
H. Set-HostedContentFilterPolicy
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