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Question of the Week: Level 3 - Ethics

Jorge Santa Ana, a financial advisor with Leeward Investments, mistakenly purchases some common stock for one of his clients, an investment which is unsuitable for that client.  When Santa Ana realized his mistake, he quickly sells the stock at a loss, then uses his own money to reimburse the account for the loss and the trading fees.  Despite having a somewhat rocky relationship with this client, Santa Ana immediately informs him of the error, and that it was corrected at Santa Ana’s expense.  Santa Ana has most likely:

Question of the Week: Level 3 - Ethics 9 votes

A. violated Standard III(C) Suitability.
22% 2 votes
B. not violated CFA Institute Standards of Professional Conduct.
33% 3 votes
C. violated both Standard I(D) Misconduct and Standard III(C) Suitability.
44% 4 votes


  • MarkMeldrumMarkMeldrum OntarioPosts: 73 Associate
    The correct answer is Option B.

    Since the purchase of the stock was a mistake, Santa Ana has not violated Standard III(C) Suitability.

    Since he corrected the error immediately upon recognizing it, reimbursed the account for the loss and the trading fees, and immediately informed the client of the error, he has not violated Standard I (D).

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