微信扫一扫
实时资讯全掌握
|
Preston Partners Case Study (Refer to CFA Institute Standards of Practice Casebook for details).
Preston partners is a medium-sized investment management firm which adopted the Code and Standards as part of its policy manual. Gerald Smithson, CFA, a portfolio manager, had recently added the stock of Utah Biochemical Company and Norgood PLC to all his clients' investment portfolios. Smithson had a personal relationship with the president of Utah Biochemical. Shortly afterwards Utah Biochemicals and Norgood announced a merger which increased the share prices of both companies.
Smithson contends that he saw the president of Utah Biochemical dining with the chairman of Norgood but did not overhear their conversation. Smithson researched both companies extensively and determined that each company was a good investment. He also pondered whether there would be a merger as they seemed to complement each other. He put in block trades for shares of each company which were executed over a period of two weeks at various prices. Preston's policies were not clear in this area so he allocated the shares by starting with his largest client and working down to small accounts. Some of Smithson's clients were very conservative personal trust accounts; others were pension funds which had aggressive investment objectives.
Which of the following statements is CORRECT? A. Utah Biochemical was an appropriate investment for Preston's personal trust accounts. B. Smithson failed to comply with Standard III(C) regarding suitability of investments for clients portfolios. C. Smithson acted on inside information because he had observed senior executives of Norgood and Utah Biochemical having lunch together, in violation of Standard II(A). |