One of the first things Johnson did after arriving at the firm was to meet with Corey Tao, CFA, the firm’s chief compliance officer. Tao had been with the firm only a few months. He told Johnson the previous violations had primarily related to equity research, equity trading, and client confidentiality. After reviewing the summary of violations and the firm’s existing handbook, Johnson and Tao decided to submit the following recommendations regarding the firm’s trade allocation procedures for block trades to the board of directors for approval:
- Recommendation 1: All accounts participating in a block trade should receive the same execution price and pay the same commission rate.
- Recommendation 2: Orders will be executed on a first-in, first-out basis, with consideration given to bundling orders for efficiency.
Are the recommendations submitted to the board of directors most likely consistent with the CFA Institute Recommended Procedures for Compliance with Standard III(B): Fair Dealing?
A. Yes
B. No with regard to Recommendation 1
C. No with regard to Recommendation 2
Please share the answer. Is it option B?
Option A?
Option B is the answer