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Question:
Rob Elliott, CFA, is an analyst with a large asset management firm.His personal portfolio includes a large amount of common stock of Tech Inc., a semiconductor company, which his firm does not currently follow. The director of the research department has asked Elliott to analyze Tech and write a report about its investment potential. Based on the CFA Institute Standards of Professional Conduct, the most appropriate course of action for Elliot is to:
A
disclose the ownership of the stock to his employer and in the report, if he writes it.
explanation
According to Standard VI(A) Disclosure of Conflicts, Elliott should disclose his beneficial ownership of Tech to his employer and to clients and prospects because such ownership could interfere with his ability to make unbiased and objective recommendations. Selling his shares or declining to write the report are not required and are more extreme than simply disclosing the potential conflict.
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