Ethical and Professional Standards

Helena Quarry, CFA, is chief investment officer of Brisewood Partners, a quantitative equity manager. She supervises eight portfolio managers and analysts. Brisewood has written compliance procedures for personal trading that require every personal trade to be cleared in advance.

A trading report shows that analyst Niall Corbin bought shares in his personal account on three occasions in the days before Brisewood bought the same stocks for clients. None of his trades was cleared in advance. Quarry speaks to Corbin, who promises that it will not happen again. She takes no further step: she does not investigate the trades, restrict his trading or tell the compliance department.

Brisewood's flagship strategy has always used a five-factor model that balances value, quality, momentum, size and low volatility. In March the research team replaces it with a model based mainly on short-term price momentum. The change is expected to raise the portfolio's turnover from about 40% a year to about 200% and to change its risk profile. Quarry approves the change and decides not to tell clients, because she believes the new model is better.

To evaluate a new emerging-market strategy, Brisewood buys country risk research from Ostrava Research Group, an outside firm. Before using it, Quarry's team reviews Ostrava's methods, data sources and forecasting assumptions, checks a sample of its past forecasts against outcomes, and concludes that the research is sound.

Brisewood's analysts keep the data, model output and notes that support each investment decision in a central archive. To cut storage costs, Quarry orders that all such records older than 12 months be deleted. No regulation in Brisewood's jurisdiction sets a period for keeping these records, and Brisewood has no retention policy.

Helena Quarry, CFA, is chief investment officer of Brisewood Partners, a quantitative equity manager. She supervises eight portfolio managers and analysts. Brisewood has written compliance procedures for personal trading that require every personal trade to be cleared in advance.

A trading report shows that analyst Niall Corbin bought shares in his personal account on three occasions in the days before Brisewood bought the same stocks for clients. None of his trades was cleared in advance. Quarry speaks to Corbin, who promises that it will not happen again. She takes no further step: she does not investigate the trades, restrict his trading or tell the compliance department.

Brisewood's flagship strategy has always used a five-factor model that balances value, quality, momentum, size and low volatility. In March the research team replaces it with a model based mainly on short-term price momentum. The change is expected to raise the portfolio's turnover from about 40% a year to about 200% and to change its risk profile. Quarry approves the change and decides not to tell clients, because she believes the new model is better.

To evaluate a new emerging-market strategy, Brisewood buys country risk research from Ostrava Research Group, an outside firm. Before using it, Quarry's team reviews Ostrava's methods, data sources and forecasting assumptions, checks a sample of its past forecasts against outcomes, and concludes that the research is sound.

Brisewood's analysts keep the data, model output and notes that support each investment decision in a central archive. To cut storage costs, Quarry orders that all such records older than 12 months be deleted. No regulation in Brisewood's jurisdiction sets a period for keeping these records, and Brisewood has no retention policy.

Helena Quarry, CFA, is chief investment officer of Brisewood Partners, a quantitative equity manager. She supervises eight portfolio managers and analysts. Brisewood has written compliance procedures for personal trading that require every personal trade to be cleared in advance.

A trading report shows that analyst Niall Corbin bought shares in his personal account on three occasions in the days before Brisewood bought the same stocks for clients. None of his trades was cleared in advance. Quarry speaks to Corbin, who promises that it will not happen again. She takes no further step: she does not investigate the trades, restrict his trading or tell the compliance department.

Brisewood's flagship strategy has always used a five-factor model that balances value, quality, momentum, size and low volatility. In March the research team replaces it with a model based mainly on short-term price momentum. The change is expected to raise the portfolio's turnover from about 40% a year to about 200% and to change its risk profile. Quarry approves the change and decides not to tell clients, because she believes the new model is better.

To evaluate a new emerging-market strategy, Brisewood buys country risk research from Ostrava Research Group, an outside firm. Before using it, Quarry's team reviews Ostrava's methods, data sources and forecasting assumptions, checks a sample of its past forecasts against outcomes, and concludes that the research is sound.

Brisewood's analysts keep the data, model output and notes that support each investment decision in a central archive. To cut storage costs, Quarry orders that all such records older than 12 months be deleted. No regulation in Brisewood's jurisdiction sets a period for keeping these records, and Brisewood has no retention policy.

Helena Quarry, CFA, is chief investment officer of Brisewood Partners, a quantitative equity manager. She supervises eight portfolio managers and analysts. Brisewood has written compliance procedures for personal trading that require every personal trade to be cleared in advance.

A trading report shows that analyst Niall Corbin bought shares in his personal account on three occasions in the days before Brisewood bought the same stocks for clients. None of his trades was cleared in advance. Quarry speaks to Corbin, who promises that it will not happen again. She takes no further step: she does not investigate the trades, restrict his trading or tell the compliance department.

Brisewood's flagship strategy has always used a five-factor model that balances value, quality, momentum, size and low volatility. In March the research team replaces it with a model based mainly on short-term price momentum. The change is expected to raise the portfolio's turnover from about 40% a year to about 200% and to change its risk profile. Quarry approves the change and decides not to tell clients, because she believes the new model is better.

To evaluate a new emerging-market strategy, Brisewood buys country risk research from Ostrava Research Group, an outside firm. Before using it, Quarry's team reviews Ostrava's methods, data sources and forecasting assumptions, checks a sample of its past forecasts against outcomes, and concludes that the research is sound.

Brisewood's analysts keep the data, model output and notes that support each investment decision in a central archive. To cut storage costs, Quarry orders that all such records older than 12 months be deleted. No regulation in Brisewood's jurisdiction sets a period for keeping these records, and Brisewood has no retention policy.

Mara Halvorsen, CFA, is a private wealth adviser at Brookhollow Wealth Partners, a registered investment adviser. Each of her clients has a written investment policy statement (IPS) that she reviews with the client at least once a year. Halvorsen has discretionary authority over all of the accounts described below.

Walter Dunmore, aged 71, is a retired school administrator. His IPS, signed six months ago, describes his risk tolerance as below average, his main objective as stable income to supplement his pension, and his liquidity needs as moderate. His $1.2 million portfolio holds investment-grade bonds and dividend-paying equities. After reading about the strong recent returns of the Pallister Frontier Opportunities Fund, a leveraged fund that invests in frontier-market equities, Halvorsen moves 30% of Dunmore's portfolio into the fund. Dunmore did not ask for the change, and Halvorsen does not discuss it with him before or after the trade.

Grace Okafor, aged 45, has an IPS that describes her risk tolerance as above average and her time horizon as more than 20 years. Okafor calls Halvorsen and asks her to buy $20,000 of shares in a small biotechnology company that a friend recommended. The purchase would be about 2% of Okafor's $1.0 million portfolio. Halvorsen tells Okafor that she has not researched the company and that the stock is more speculative than anything else in the portfolio. Okafor still wants the shares. Halvorsen buys them, records in the account file that the trade was requested by the client against her advice, and sends Okafor a written confirmation that says the same.

Dunmore's daughter, Claire, calls the office. She has no authority over her father's account, and she is not named in any document the firm holds. Claire says she is worried about her father's finances and asks for the account's value and holdings. Halvorsen, who has met Claire at a family event, tells her the account value and its five largest holdings. Dunmore has never given permission for his information to be shared with his family.

Halvorsen is also preparing a presentation for a prospective client. She manages 40 accounts with the same balanced mandate. She selects the three accounts with the highest returns over the past five years and shows their average annual return on a slide titled "Typical results for our balanced clients." The slide does not say how the accounts were chosen or how many balanced accounts she manages.

Mara Halvorsen, CFA, is a private wealth adviser at Brookhollow Wealth Partners, a registered investment adviser. Each of her clients has a written investment policy statement (IPS) that she reviews with the client at least once a year. Halvorsen has discretionary authority over all of the accounts described below.

Walter Dunmore, aged 71, is a retired school administrator. His IPS, signed six months ago, describes his risk tolerance as below average, his main objective as stable income to supplement his pension, and his liquidity needs as moderate. His $1.2 million portfolio holds investment-grade bonds and dividend-paying equities. After reading about the strong recent returns of the Pallister Frontier Opportunities Fund, a leveraged fund that invests in frontier-market equities, Halvorsen moves 30% of Dunmore's portfolio into the fund. Dunmore did not ask for the change, and Halvorsen does not discuss it with him before or after the trade.

Grace Okafor, aged 45, has an IPS that describes her risk tolerance as above average and her time horizon as more than 20 years. Okafor calls Halvorsen and asks her to buy $20,000 of shares in a small biotechnology company that a friend recommended. The purchase would be about 2% of Okafor's $1.0 million portfolio. Halvorsen tells Okafor that she has not researched the company and that the stock is more speculative than anything else in the portfolio. Okafor still wants the shares. Halvorsen buys them, records in the account file that the trade was requested by the client against her advice, and sends Okafor a written confirmation that says the same.

Dunmore's daughter, Claire, calls the office. She has no authority over her father's account, and she is not named in any document the firm holds. Claire says she is worried about her father's finances and asks for the account's value and holdings. Halvorsen, who has met Claire at a family event, tells her the account value and its five largest holdings. Dunmore has never given permission for his information to be shared with his family.

Halvorsen is also preparing a presentation for a prospective client. She manages 40 accounts with the same balanced mandate. She selects the three accounts with the highest returns over the past five years and shows their average annual return on a slide titled "Typical results for our balanced clients." The slide does not say how the accounts were chosen or how many balanced accounts she manages.

Mara Halvorsen, CFA, is a private wealth adviser at Brookhollow Wealth Partners, a registered investment adviser. Each of her clients has a written investment policy statement (IPS) that she reviews with the client at least once a year. Halvorsen has discretionary authority over all of the accounts described below.

Walter Dunmore, aged 71, is a retired school administrator. His IPS, signed six months ago, describes his risk tolerance as below average, his main objective as stable income to supplement his pension, and his liquidity needs as moderate. His $1.2 million portfolio holds investment-grade bonds and dividend-paying equities. After reading about the strong recent returns of the Pallister Frontier Opportunities Fund, a leveraged fund that invests in frontier-market equities, Halvorsen moves 30% of Dunmore's portfolio into the fund. Dunmore did not ask for the change, and Halvorsen does not discuss it with him before or after the trade.

Grace Okafor, aged 45, has an IPS that describes her risk tolerance as above average and her time horizon as more than 20 years. Okafor calls Halvorsen and asks her to buy $20,000 of shares in a small biotechnology company that a friend recommended. The purchase would be about 2% of Okafor's $1.0 million portfolio. Halvorsen tells Okafor that she has not researched the company and that the stock is more speculative than anything else in the portfolio. Okafor still wants the shares. Halvorsen buys them, records in the account file that the trade was requested by the client against her advice, and sends Okafor a written confirmation that says the same.

Dunmore's daughter, Claire, calls the office. She has no authority over her father's account, and she is not named in any document the firm holds. Claire says she is worried about her father's finances and asks for the account's value and holdings. Halvorsen, who has met Claire at a family event, tells her the account value and its five largest holdings. Dunmore has never given permission for his information to be shared with his family.

Halvorsen is also preparing a presentation for a prospective client. She manages 40 accounts with the same balanced mandate. She selects the three accounts with the highest returns over the past five years and shows their average annual return on a slide titled "Typical results for our balanced clients." The slide does not say how the accounts were chosen or how many balanced accounts she manages.

Mara Halvorsen, CFA, is a private wealth adviser at Brookhollow Wealth Partners, a registered investment adviser. Each of her clients has a written investment policy statement (IPS) that she reviews with the client at least once a year. Halvorsen has discretionary authority over all of the accounts described below.

Walter Dunmore, aged 71, is a retired school administrator. His IPS, signed six months ago, describes his risk tolerance as below average, his main objective as stable income to supplement his pension, and his liquidity needs as moderate. His $1.2 million portfolio holds investment-grade bonds and dividend-paying equities. After reading about the strong recent returns of the Pallister Frontier Opportunities Fund, a leveraged fund that invests in frontier-market equities, Halvorsen moves 30% of Dunmore's portfolio into the fund. Dunmore did not ask for the change, and Halvorsen does not discuss it with him before or after the trade.

Grace Okafor, aged 45, has an IPS that describes her risk tolerance as above average and her time horizon as more than 20 years. Okafor calls Halvorsen and asks her to buy $20,000 of shares in a small biotechnology company that a friend recommended. The purchase would be about 2% of Okafor's $1.0 million portfolio. Halvorsen tells Okafor that she has not researched the company and that the stock is more speculative than anything else in the portfolio. Okafor still wants the shares. Halvorsen buys them, records in the account file that the trade was requested by the client against her advice, and sends Okafor a written confirmation that says the same.

Dunmore's daughter, Claire, calls the office. She has no authority over her father's account, and she is not named in any document the firm holds. Claire says she is worried about her father's finances and asks for the account's value and holdings. Halvorsen, who has met Claire at a family event, tells her the account value and its five largest holdings. Dunmore has never given permission for his information to be shared with his family.

Halvorsen is also preparing a presentation for a prospective client. She manages 40 accounts with the same balanced mandate. She selects the three accounts with the highest returns over the past five years and shows their average annual return on a slide titled "Typical results for our balanced clients." The slide does not say how the accounts were chosen or how many balanced accounts she manages.

Sophie Fenwick, CFA, is a senior portfolio manager at Garrow Lane Wealth, where she manages about 120 client relationships. She has signed no noncompete or nonsolicitation agreement with Garrow Lane. Garrow Lane's employee handbook states that client files and contact lists are the property of the firm. After ten years at the firm, Fenwick decides to leave and start her own firm, Fenwick Private Capital, which will offer discretionary portfolio management to families with $2 million or more to invest. She plans to give Garrow Lane two weeks' notice.

While still employed at Garrow Lane, Fenwick spends evenings and weekends, at her own expense, registering the new firm with the regulator, leasing an office and interviewing an assistant. She does not contact any Garrow Lane client about her plans. In her last week at Garrow Lane she copies the firm's client contact list, with names, phone numbers and account sizes, to a personal storage device.

Two months before she resigns, Raymond Hollis, a long-standing Garrow Lane client, offers to pay Fenwick a personal bonus of $15,000 if his portfolio beats its benchmark this year. Fenwick accepts the offer. She does not tell anyone at Garrow Lane.

After she resigns, Fenwick deletes the copied list without using it. She then calls former clients whose names she remembers, looking up their phone numbers in public directories, and tells them about her new firm.

Fenwick Private Capital's new brochure states: "Sophie Fenwick passed the three levels of the CFA Program examinations in three consecutive years." The statement is true, and Fenwick has been a CFA charterholder and a CFA Institute member in good standing since she was awarded the charter. The brochure makes no other reference to the CFA Program.

Sophie Fenwick, CFA, is a senior portfolio manager at Garrow Lane Wealth, where she manages about 120 client relationships. She has signed no noncompete or nonsolicitation agreement with Garrow Lane. Garrow Lane's employee handbook states that client files and contact lists are the property of the firm. After ten years at the firm, Fenwick decides to leave and start her own firm, Fenwick Private Capital, which will offer discretionary portfolio management to families with $2 million or more to invest. She plans to give Garrow Lane two weeks' notice.

While still employed at Garrow Lane, Fenwick spends evenings and weekends, at her own expense, registering the new firm with the regulator, leasing an office and interviewing an assistant. She does not contact any Garrow Lane client about her plans. In her last week at Garrow Lane she copies the firm's client contact list, with names, phone numbers and account sizes, to a personal storage device.

Two months before she resigns, Raymond Hollis, a long-standing Garrow Lane client, offers to pay Fenwick a personal bonus of $15,000 if his portfolio beats its benchmark this year. Fenwick accepts the offer. She does not tell anyone at Garrow Lane.

After she resigns, Fenwick deletes the copied list without using it. She then calls former clients whose names she remembers, looking up their phone numbers in public directories, and tells them about her new firm.

Fenwick Private Capital's new brochure states: "Sophie Fenwick passed the three levels of the CFA Program examinations in three consecutive years." The statement is true, and Fenwick has been a CFA charterholder and a CFA Institute member in good standing since she was awarded the charter. The brochure makes no other reference to the CFA Program.

Sophie Fenwick, CFA, is a senior portfolio manager at Garrow Lane Wealth, where she manages about 120 client relationships. She has signed no noncompete or nonsolicitation agreement with Garrow Lane. Garrow Lane's employee handbook states that client files and contact lists are the property of the firm. After ten years at the firm, Fenwick decides to leave and start her own firm, Fenwick Private Capital, which will offer discretionary portfolio management to families with $2 million or more to invest. She plans to give Garrow Lane two weeks' notice.

While still employed at Garrow Lane, Fenwick spends evenings and weekends, at her own expense, registering the new firm with the regulator, leasing an office and interviewing an assistant. She does not contact any Garrow Lane client about her plans. In her last week at Garrow Lane she copies the firm's client contact list, with names, phone numbers and account sizes, to a personal storage device.

Two months before she resigns, Raymond Hollis, a long-standing Garrow Lane client, offers to pay Fenwick a personal bonus of $15,000 if his portfolio beats its benchmark this year. Fenwick accepts the offer. She does not tell anyone at Garrow Lane.

After she resigns, Fenwick deletes the copied list without using it. She then calls former clients whose names she remembers, looking up their phone numbers in public directories, and tells them about her new firm.

Fenwick Private Capital's new brochure states: "Sophie Fenwick passed the three levels of the CFA Program examinations in three consecutive years." The statement is true, and Fenwick has been a CFA charterholder and a CFA Institute member in good standing since she was awarded the charter. The brochure makes no other reference to the CFA Program.

Hollins Reach Capital is an investment manager with institutional, mutual fund and private client divisions. Its board has decided that the firm will adopt the CFA Institute Asset Manager Code of Professional Conduct (the AMC). The chief executive, Priya Lenhart, CFA, leads the project and presents four proposals to the board.

Proposal 1. Hollins Reach does not yet have a business continuity plan, and Lenhart expects to adopt one next year. She proposes that the firm announce now that it "complies with the AMC in all respects except the requirement for a business continuity plan."

Proposal 2. Compliance would be monitored by the head of each division for that division. No single person would be responsible for the firm's compliance policies as a whole.

Proposal 3. Institutional portfolios hold privately negotiated loans that have no market price. At present, each portfolio manager values the loans in his own portfolios, using his own judgment, and portfolio managers' bonuses depend on the returns of their portfolios. Lenhart proposes to keep this practice.

Proposal 4. Hollins Reach owns a broker, Reach Execution Services. The firm's traders send all client orders to Reach Execution, whose commissions are above those of other brokers with similar service. Clients have not been told that Reach Execution is affiliated with Hollins Reach. Lenhart proposes to keep this practice because it adds to the firm's profit.

The board asks Lenhart to revise any proposal that would be inconsistent with the AMC before the firm claims compliance. It also asks her to prepare a timetable for training staff in all three divisions on the new policies and for reporting progress to the board each quarter.

Hollins Reach Capital is an investment manager with institutional, mutual fund and private client divisions. Its board has decided that the firm will adopt the CFA Institute Asset Manager Code of Professional Conduct (the AMC). The chief executive, Priya Lenhart, CFA, leads the project and presents four proposals to the board.

Proposal 1. Hollins Reach does not yet have a business continuity plan, and Lenhart expects to adopt one next year. She proposes that the firm announce now that it "complies with the AMC in all respects except the requirement for a business continuity plan."

Proposal 2. Compliance would be monitored by the head of each division for that division. No single person would be responsible for the firm's compliance policies as a whole.

Proposal 3. Institutional portfolios hold privately negotiated loans that have no market price. At present, each portfolio manager values the loans in his own portfolios, using his own judgment, and portfolio managers' bonuses depend on the returns of their portfolios. Lenhart proposes to keep this practice.

Proposal 4. Hollins Reach owns a broker, Reach Execution Services. The firm's traders send all client orders to Reach Execution, whose commissions are above those of other brokers with similar service. Clients have not been told that Reach Execution is affiliated with Hollins Reach. Lenhart proposes to keep this practice because it adds to the firm's profit.

The board asks Lenhart to revise any proposal that would be inconsistent with the AMC before the firm claims compliance. It also asks her to prepare a timetable for training staff in all three divisions on the new policies and for reporting progress to the board each quarter.

Hollins Reach Capital is an investment manager with institutional, mutual fund and private client divisions. Its board has decided that the firm will adopt the CFA Institute Asset Manager Code of Professional Conduct (the AMC). The chief executive, Priya Lenhart, CFA, leads the project and presents four proposals to the board.

Proposal 1. Hollins Reach does not yet have a business continuity plan, and Lenhart expects to adopt one next year. She proposes that the firm announce now that it "complies with the AMC in all respects except the requirement for a business continuity plan."

Proposal 2. Compliance would be monitored by the head of each division for that division. No single person would be responsible for the firm's compliance policies as a whole.

Proposal 3. Institutional portfolios hold privately negotiated loans that have no market price. At present, each portfolio manager values the loans in his own portfolios, using his own judgment, and portfolio managers' bonuses depend on the returns of their portfolios. Lenhart proposes to keep this practice.

Proposal 4. Hollins Reach owns a broker, Reach Execution Services. The firm's traders send all client orders to Reach Execution, whose commissions are above those of other brokers with similar service. Clients have not been told that Reach Execution is affiliated with Hollins Reach. Lenhart proposes to keep this practice because it adds to the firm's profit.

The board asks Lenhart to revise any proposal that would be inconsistent with the AMC before the firm claims compliance. It also asks her to prepare a timetable for training staff in all three divisions on the new policies and for reporting progress to the board each quarter.

Hollins Reach Capital is an investment manager with institutional, mutual fund and private client divisions. Its board has decided that the firm will adopt the CFA Institute Asset Manager Code of Professional Conduct (the AMC). The chief executive, Priya Lenhart, CFA, leads the project and presents four proposals to the board.

Proposal 1. Hollins Reach does not yet have a business continuity plan, and Lenhart expects to adopt one next year. She proposes that the firm announce now that it "complies with the AMC in all respects except the requirement for a business continuity plan."

Proposal 2. Compliance would be monitored by the head of each division for that division. No single person would be responsible for the firm's compliance policies as a whole.

Proposal 3. Institutional portfolios hold privately negotiated loans that have no market price. At present, each portfolio manager values the loans in his own portfolios, using his own judgment, and portfolio managers' bonuses depend on the returns of their portfolios. Lenhart proposes to keep this practice.

Proposal 4. Hollins Reach owns a broker, Reach Execution Services. The firm's traders send all client orders to Reach Execution, whose commissions are above those of other brokers with similar service. Clients have not been told that Reach Execution is affiliated with Hollins Reach. Lenhart proposes to keep this practice because it adds to the firm's profit.

The board asks Lenhart to revise any proposal that would be inconsistent with the AMC before the firm claims compliance. It also asks her to prepare a timetable for training staff in all three divisions on the new policies and for reporting progress to the board each quarter.

Isla Calderwood works as an analyst at Penhallow Capital, an investment manager that runs equity and balanced portfolios for pension plans and charities. She has sat the Level III exam of the CFA Program and is waiting for her result. She is not a CFA Institute member. Her manager is Desmond Achebe, who was awarded the CFA charter ten years ago. Penhallow encourages its analysts to complete the CFA Program and pays their exam fees, and its marketing materials list the professional qualifications of each member of the investment team.

A colleague tells Calderwood that the Code of Ethics and Standards of Professional Conduct bind only CFA Institute members, so they do not apply to her until she becomes a member.

The evening after her exam, Calderwood posts in an online study forum a list of the specific topics that appeared in the essay questions and two formulas that she was asked to apply, to help candidates who will sit the exam in a later window.

Calderwood orders new business cards that read "Isla Calderwood, CFA (expected 2027)." She expects to meet the work experience requirement in 2027.

Achebe did not pay his CFA Institute membership dues for the past two years and did not return his annual Professional Conduct Statement, and his membership has lapsed. He continues to sign client letters "Desmond Achebe, CFA," and his biography in Penhallow's pitch book still describes him as a CFA charterholder. He has not applied to reinstate his membership. Penhallow's compliance officer has asked Calderwood to help review the team's biographies and business cards before the firm's next marketing campaign.

Isla Calderwood works as an analyst at Penhallow Capital, an investment manager that runs equity and balanced portfolios for pension plans and charities. She has sat the Level III exam of the CFA Program and is waiting for her result. She is not a CFA Institute member. Her manager is Desmond Achebe, who was awarded the CFA charter ten years ago. Penhallow encourages its analysts to complete the CFA Program and pays their exam fees, and its marketing materials list the professional qualifications of each member of the investment team.

A colleague tells Calderwood that the Code of Ethics and Standards of Professional Conduct bind only CFA Institute members, so they do not apply to her until she becomes a member.

The evening after her exam, Calderwood posts in an online study forum a list of the specific topics that appeared in the essay questions and two formulas that she was asked to apply, to help candidates who will sit the exam in a later window.

Calderwood orders new business cards that read "Isla Calderwood, CFA (expected 2027)." She expects to meet the work experience requirement in 2027.

Achebe did not pay his CFA Institute membership dues for the past two years and did not return his annual Professional Conduct Statement, and his membership has lapsed. He continues to sign client letters "Desmond Achebe, CFA," and his biography in Penhallow's pitch book still describes him as a CFA charterholder. He has not applied to reinstate his membership. Penhallow's compliance officer has asked Calderwood to help review the team's biographies and business cards before the firm's next marketing campaign.

Isla Calderwood works as an analyst at Penhallow Capital, an investment manager that runs equity and balanced portfolios for pension plans and charities. She has sat the Level III exam of the CFA Program and is waiting for her result. She is not a CFA Institute member. Her manager is Desmond Achebe, who was awarded the CFA charter ten years ago. Penhallow encourages its analysts to complete the CFA Program and pays their exam fees, and its marketing materials list the professional qualifications of each member of the investment team.

A colleague tells Calderwood that the Code of Ethics and Standards of Professional Conduct bind only CFA Institute members, so they do not apply to her until she becomes a member.

The evening after her exam, Calderwood posts in an online study forum a list of the specific topics that appeared in the essay questions and two formulas that she was asked to apply, to help candidates who will sit the exam in a later window.

Calderwood orders new business cards that read "Isla Calderwood, CFA (expected 2027)." She expects to meet the work experience requirement in 2027.

Achebe did not pay his CFA Institute membership dues for the past two years and did not return his annual Professional Conduct Statement, and his membership has lapsed. He continues to sign client letters "Desmond Achebe, CFA," and his biography in Penhallow's pitch book still describes him as a CFA charterholder. He has not applied to reinstate his membership. Penhallow's compliance officer has asked Calderwood to help review the team's biographies and business cards before the firm's next marketing campaign.

Isla Calderwood works as an analyst at Penhallow Capital, an investment manager that runs equity and balanced portfolios for pension plans and charities. She has sat the Level III exam of the CFA Program and is waiting for her result. She is not a CFA Institute member. Her manager is Desmond Achebe, who was awarded the CFA charter ten years ago. Penhallow encourages its analysts to complete the CFA Program and pays their exam fees, and its marketing materials list the professional qualifications of each member of the investment team.

A colleague tells Calderwood that the Code of Ethics and Standards of Professional Conduct bind only CFA Institute members, so they do not apply to her until she becomes a member.

The evening after her exam, Calderwood posts in an online study forum a list of the specific topics that appeared in the essay questions and two formulas that she was asked to apply, to help candidates who will sit the exam in a later window.

Calderwood orders new business cards that read "Isla Calderwood, CFA (expected 2027)." She expects to meet the work experience requirement in 2027.

Achebe did not pay his CFA Institute membership dues for the past two years and did not return his annual Professional Conduct Statement, and his membership has lapsed. He continues to sign client letters "Desmond Achebe, CFA," and his biography in Penhallow's pitch book still describes him as a CFA charterholder. He has not applied to reinstate his membership. Penhallow's compliance officer has asked Calderwood to help review the team's biographies and business cards before the firm's next marketing campaign.

Nadia Gilmore, CFA, is a portfolio manager at Thistlewood Investment Partners, which manages discretionary accounts for individuals and runs a long/short equity fund.

Frank Ossler, aged 63, has an IPS that describes his objective as long-term growth and his risk tolerance as above average. His $3 million portfolio is 75% equities. Ossler tells Gilmore that he has just sold his business for $8 million, which he will add to the account, and that he will retire this year. He expects to need about $250,000 a year from his portfolio to live on. His next scheduled IPS review is in ten months.

A Thistlewood trader, working from Gilmore's instructions, mistakenly buys 10,000 shares of Penwick Foods for Ossler's account instead of shares of Pennock Foods. When the error is found two days later, Penwick's price has fallen, and the position shows a loss of $14,000.

Thistlewood plans to market a new Dividend Growth strategy that has no live track record. Gilmore's team has back-tested the strategy's rules over the past ten years, and the back-test shows a return of 11% a year. The marketing team wants to show this result to prospective clients.

The long/short fund needs to sell 20,000 shares of Arlen Rail. At the same time, a private client account for which Arlen Rail is suitable is due to buy the same number of shares. Thistlewood's written policy, disclosed to all clients, permits cross trades between client accounts when the trade is in the interest of both accounts and both have consented in advance to cross trading. The fund earns a performance fee; the private client pays a fixed fee.

Nadia Gilmore, CFA, is a portfolio manager at Thistlewood Investment Partners, which manages discretionary accounts for individuals and runs a long/short equity fund.

Frank Ossler, aged 63, has an IPS that describes his objective as long-term growth and his risk tolerance as above average. His $3 million portfolio is 75% equities. Ossler tells Gilmore that he has just sold his business for $8 million, which he will add to the account, and that he will retire this year. He expects to need about $250,000 a year from his portfolio to live on. His next scheduled IPS review is in ten months.

A Thistlewood trader, working from Gilmore's instructions, mistakenly buys 10,000 shares of Penwick Foods for Ossler's account instead of shares of Pennock Foods. When the error is found two days later, Penwick's price has fallen, and the position shows a loss of $14,000.

Thistlewood plans to market a new Dividend Growth strategy that has no live track record. Gilmore's team has back-tested the strategy's rules over the past ten years, and the back-test shows a return of 11% a year. The marketing team wants to show this result to prospective clients.

The long/short fund needs to sell 20,000 shares of Arlen Rail. At the same time, a private client account for which Arlen Rail is suitable is due to buy the same number of shares. Thistlewood's written policy, disclosed to all clients, permits cross trades between client accounts when the trade is in the interest of both accounts and both have consented in advance to cross trading. The fund earns a performance fee; the private client pays a fixed fee.

Nadia Gilmore, CFA, is a portfolio manager at Thistlewood Investment Partners, which manages discretionary accounts for individuals and runs a long/short equity fund.

Frank Ossler, aged 63, has an IPS that describes his objective as long-term growth and his risk tolerance as above average. His $3 million portfolio is 75% equities. Ossler tells Gilmore that he has just sold his business for $8 million, which he will add to the account, and that he will retire this year. He expects to need about $250,000 a year from his portfolio to live on. His next scheduled IPS review is in ten months.

A Thistlewood trader, working from Gilmore's instructions, mistakenly buys 10,000 shares of Penwick Foods for Ossler's account instead of shares of Pennock Foods. When the error is found two days later, Penwick's price has fallen, and the position shows a loss of $14,000.

Thistlewood plans to market a new Dividend Growth strategy that has no live track record. Gilmore's team has back-tested the strategy's rules over the past ten years, and the back-test shows a return of 11% a year. The marketing team wants to show this result to prospective clients.

The long/short fund needs to sell 20,000 shares of Arlen Rail. At the same time, a private client account for which Arlen Rail is suitable is due to buy the same number of shares. Thistlewood's written policy, disclosed to all clients, permits cross trades between client accounts when the trade is in the interest of both accounts and both have consented in advance to cross trading. The fund earns a performance fee; the private client pays a fixed fee.

Nadia Gilmore, CFA, is a portfolio manager at Thistlewood Investment Partners, which manages discretionary accounts for individuals and runs a long/short equity fund.

Frank Ossler, aged 63, has an IPS that describes his objective as long-term growth and his risk tolerance as above average. His $3 million portfolio is 75% equities. Ossler tells Gilmore that he has just sold his business for $8 million, which he will add to the account, and that he will retire this year. He expects to need about $250,000 a year from his portfolio to live on. His next scheduled IPS review is in ten months.

A Thistlewood trader, working from Gilmore's instructions, mistakenly buys 10,000 shares of Penwick Foods for Ossler's account instead of shares of Pennock Foods. When the error is found two days later, Penwick's price has fallen, and the position shows a loss of $14,000.

Thistlewood plans to market a new Dividend Growth strategy that has no live track record. Gilmore's team has back-tested the strategy's rules over the past ten years, and the back-test shows a return of 11% a year. The marketing team wants to show this result to prospective clients.

The long/short fund needs to sell 20,000 shares of Arlen Rail. At the same time, a private client account for which Arlen Rail is suitable is due to buy the same number of shares. Thistlewood's written policy, disclosed to all clients, permits cross trades between client accounts when the trade is in the interest of both accounts and both have consented in advance to cross trading. The fund earns a performance fee; the private client pays a fixed fee.

Elena Morland, CFA, is an equity analyst at Thorncastle Securities, a broker-dealer with an investment banking division. Her research goes to Thorncastle's institutional clients and to the advisers who serve its private clients.

Morland's new report on Brindle Software includes a summary box that reads: "Brindle's revenue will grow 20% a year for the next five years." The figure is her own forecast from her model. Nowhere does the report describe it as a forecast or an opinion.

Morland sits on Thorncastle's research committee, which issues ratings by majority vote. The committee rates Ketterley Foods a hold. Morland voted for a sell rating, but she agrees that the committee's analysis is thorough and has a reasonable and adequate basis. The report is published under the committee's name and lists her as a member. She does not ask to have her name removed.

Thorncastle's banking division is competing to arrange a bond issue for Saltmarsh Energy. The head of banking tells Morland that the mandate depends on her raising her rating on Saltmarsh from hold to buy. Her model, which she has not changed, still supports a hold rating. She raises the rating to buy.

Morland also recommends to Thorncastle's private-client advisers a structured note issued by a bank. The note's return is linked to an equity index, its gain is capped and the issuer can call it early. Morland bases her recommendation only on the issuer's two-page marketing summary. She has not read the note's prospectus and does not understand how the cap and the call feature affect its returns.

Elena Morland, CFA, is an equity analyst at Thorncastle Securities, a broker-dealer with an investment banking division. Her research goes to Thorncastle's institutional clients and to the advisers who serve its private clients.

Morland's new report on Brindle Software includes a summary box that reads: "Brindle's revenue will grow 20% a year for the next five years." The figure is her own forecast from her model. Nowhere does the report describe it as a forecast or an opinion.

Morland sits on Thorncastle's research committee, which issues ratings by majority vote. The committee rates Ketterley Foods a hold. Morland voted for a sell rating, but she agrees that the committee's analysis is thorough and has a reasonable and adequate basis. The report is published under the committee's name and lists her as a member. She does not ask to have her name removed.

Thorncastle's banking division is competing to arrange a bond issue for Saltmarsh Energy. The head of banking tells Morland that the mandate depends on her raising her rating on Saltmarsh from hold to buy. Her model, which she has not changed, still supports a hold rating. She raises the rating to buy.

Morland also recommends to Thorncastle's private-client advisers a structured note issued by a bank. The note's return is linked to an equity index, its gain is capped and the issuer can call it early. Morland bases her recommendation only on the issuer's two-page marketing summary. She has not read the note's prospectus and does not understand how the cap and the call feature affect its returns.

Elena Morland, CFA, is an equity analyst at Thorncastle Securities, a broker-dealer with an investment banking division. Her research goes to Thorncastle's institutional clients and to the advisers who serve its private clients.

Morland's new report on Brindle Software includes a summary box that reads: "Brindle's revenue will grow 20% a year for the next five years." The figure is her own forecast from her model. Nowhere does the report describe it as a forecast or an opinion.

Morland sits on Thorncastle's research committee, which issues ratings by majority vote. The committee rates Ketterley Foods a hold. Morland voted for a sell rating, but she agrees that the committee's analysis is thorough and has a reasonable and adequate basis. The report is published under the committee's name and lists her as a member. She does not ask to have her name removed.

Thorncastle's banking division is competing to arrange a bond issue for Saltmarsh Energy. The head of banking tells Morland that the mandate depends on her raising her rating on Saltmarsh from hold to buy. Her model, which she has not changed, still supports a hold rating. She raises the rating to buy.

Morland also recommends to Thorncastle's private-client advisers a structured note issued by a bank. The note's return is linked to an equity index, its gain is capped and the issuer can call it early. Morland bases her recommendation only on the issuer's two-page marketing summary. She has not read the note's prospectus and does not understand how the cap and the call feature affect its returns.

Elena Morland, CFA, is an equity analyst at Thorncastle Securities, a broker-dealer with an investment banking division. Her research goes to Thorncastle's institutional clients and to the advisers who serve its private clients.

Morland's new report on Brindle Software includes a summary box that reads: "Brindle's revenue will grow 20% a year for the next five years." The figure is her own forecast from her model. Nowhere does the report describe it as a forecast or an opinion.

Morland sits on Thorncastle's research committee, which issues ratings by majority vote. The committee rates Ketterley Foods a hold. Morland voted for a sell rating, but she agrees that the committee's analysis is thorough and has a reasonable and adequate basis. The report is published under the committee's name and lists her as a member. She does not ask to have her name removed.

Thorncastle's banking division is competing to arrange a bond issue for Saltmarsh Energy. The head of banking tells Morland that the mandate depends on her raising her rating on Saltmarsh from hold to buy. Her model, which she has not changed, still supports a hold rating. She raises the rating to buy.

Morland also recommends to Thorncastle's private-client advisers a structured note issued by a bank. The note's return is linked to an equity index, its gain is capped and the issuer can call it early. Morland bases her recommendation only on the issuer's two-page marketing summary. She has not read the note's prospectus and does not understand how the cap and the call feature affect its returns.