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Records Retention Question

pcunniffpcunniff MilwaukeePosts: 30 Associate

Q. Gregor Pavlov, CFA, is a fund manager working for the general partner of a new private equity fund. Pavlov includes in the fund marketing material his performance history from his previous employer. He received permission from his former employer to take his historical recommendations and the supporting research reports he used to make those recommendations. Did Pavlov most likely violate the CFA Institute Standards?

  1. No
  2. Yes, with regard to Loyalty
  3. Yes, with regard to Record Retention

Solution

C is correct because even though Pavlov had his former employer’s permission to take his performance record and supporting research reports with him, he does not have the underlying performance data to support those historical recommendations and is therefore most likely in violation of Standard V(C)–Record Retention. Pavlov had the permission of his employer to take his historical performance record and research reports with him when he left the firm so he is not in violation of Standard IV(A)–Loyalty.


The original question states that his former employer allowed Pavlov to take his historical recommendations and supporting research reports used to make the recommendation. Wouldn't the supporting research reports be considered record retention?

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