Suzy Mercer, CFA, is currently working as a capital market adviser in a developing country. While attending a regional securities exchange conference, she introduces herself to Terrence Ong, CFA. Ong is one of several partners at Shangri-la Development Associates, a consulting firm specializing in capital market expansion in developing countries. When making her introduction, Mercer states, “I’m an independent adviser working with the government of a developing country to improve its capital market sector. I’ve heard a lot about the work you’ve done. Could we talk about my consulting assignment and a possible role for you?”
Mercer continues, “I’m currently one of a handful of CFA Charterholders residing in the country right now. I’m looking for expertise to help with a capital market development project, but none of the charterholders are qualified to assist me with the assignment despite the rigor of the CFA exams. Frankly, I am a bit surprised I couldn’t find any one to assist me with this project.” Ong responds, “I can relate. I wanted to get the CFA charter, knowing it would help me gain credibility in the early stages of my career and eventually grow our firm. It helped me get capital market development assignments because of the reputation of the CFA Program, so I now have the experience you are looking for, whereas other CFA charterholders may not have had the same opportunity.”
Mercer continues, “I’m looking for someone with your background and stellar reputation to help create a strategic plan to develop the asset management industry. The client’s goal is to get the Securities Exchange to be a part of a regional exchange. This will help the locally listed companies gain more exposure. However, given the budget I’ve been given, I can afford to hire only an individual. Ong, would this be of interest to you?”
Mercer continues the conversation by informing Ong that she will also be approaching other industry participants, particularly in the fund management industry, who are attending the conference. Ong responds, “I sure hope you are not talking to Daniel Ngyue, who manages several startup funds. I think he has a drinking problem. There is a rumor his last startup fund was not well received by the investors, likely due to his drinking. As one charterholder to another, please do your due diligence first before you hire anyone. As you have already pointed out, my reputation is stellar. Why don’t we meet tonight for dinner at my ‘members only’ club to discuss your project further? I can introduce you to other influential people who are currently looking for experienced advisers in your field for upcoming assignments. I’m sure if they knew we were working together, it would really go a long way in obtaining future assignments from these industry leaders.”
Q. In the continued conversation between Mercer and Ong, which sub-standard of Standard I: Professionalism did Ong least likely violate?
A. Misconduct
B. Misrepresentation
C. Independence and Objectivity
B is correct, because Ong least likely violated Standard I(C): Misrepresentation when stating he had a stellar reputation, since Mercer had previously noted it as one of the reasons why she was talking to him, so it is unlikely he misrepresented himself. Ong, however, did violate Standard I(A): Misconduct by maligning the reputation of Daniel Ngyue on the basis of his speculation about Ngyue’s drinking and a rumor he heard. Members and candidates are not to engage in any professional conduct that reflects adversely on their integrity. He also potentially violated Standard I(B): Independence and Objectivity by stating the influential people he could introduce her to would possibly give her future assignments if they knew they were working together. Ong is trying to influence Mercer’s decision to go with his firm by implying he could possibly increase her potential future income through his contacts rather than appointing the adviser most appropriate for her current assignment.
How is the Independence and objectivity of Ong hurt?. He is trying to influence Suzy, shouldn’t that compromise Suzy’s Independence and Objectivity rather than Ong’s?
But if one is trying to influence his intention I’d to influence which is not ethical and therefore he is in violation of the standard.
suczy’s independence will be hurt if she is in fact influenced if she isn’t influenced by the same then sucky is not in violation of the standard.
ogn even trying to influence her is a violation.
ok. thanks