As long as MIB was managing the Gold Fund in accordance to its prospectus, a decline in value does not mean that a violation has occurred. However, the prospectus does specify a certain allocation in gold. Standard V(B), Communication with Clients and Prospective Clients, requires members to disclose "general principles and investment processes" to clients and to "promptly disclose to clients and prospects any changes that might significantly affect those processes." Under the Standard, Midland management is required either to: 

1. rebalance the portfolio in a timely manner so as to maintain compliance with the investment policy, or
2. communicate an intended change in that policy well in advance of the actual change so as to afford investors time to act prior to the change in investment policy taking place. 

Midland is in violation of the Standard by not rebalancing the portfolio