1. Au-Yeung is a research analyst at BAMBOO, a registered broker/dealer and investment adviser. While employed with BAMBOO, Au-Yeung established Priority Trade Investments Limited and acts as that firm's investment adviser. Au-Yeung is responsible for formulating Priority's investment strategy and directs all trades on behalf of Priority. Over the course of several days, Au-Yeung purchases 50,000 shares of China- Pin stock and 1,978 China-Pin call options for his personal account at BAMBOO. Shortly thereafter, Au- Yeung uses $29.8 million of Priority's funds to purchase more than 3 million shares of China-Pin stock. A) Please discussion the following: . B) Explain whether each of I, II, III & IV below is correct or incorrect separately with respect to the relevant Standard. State the key points of the case that relate to the relevant Standard in your own words. Au-Yeung's actions are: acceptable because Au-Yeung's personal investments are not in conflict with the investment advice being given to his clients at Priority. acceptable as long as BAMBOO is aware of and consents to Au-Yeung establishing and working for Priority as a separate entity. III. acceptable as long as Priority clients are not negatively affected by Au-Yeung's prior purchase of China-Pin securities through his account at BAMBOO. IV. unacceptable. I. Which CFA Standard(s) of Professional Conduct do(es) the case relate to? II.
1. Au-Yeung is a research analyst at BAMBOO, a registered broker/dealer and investment adviser. While employed with BAMBOO, Au-Yeung established Priority Trade Investments Limited and acts as that firm's investment adviser. Au-Yeung is responsible for formulating Priority's investment strategy and directs all trades on behalf of Priority. Over the course of several days, Au-Yeung purchases 50,000 shares of China- Pin stock and 1,978 China-Pin call options for his personal account at BAMBOO. Shortly thereafter, Au- Yeung uses $29.8 million of Priority's funds to purchase more than 3 million shares of China-Pin stock. A) Please discussion the following: . B) Explain whether each of I, II, III & IV below is correct or incorrect separately with respect to the relevant Standard. State the key points of the case that relate to the relevant Standard in your own words. Au-Yeung's actions are: acceptable because Au-Yeung's personal investments are not in conflict with the investment advice being given to his clients at Priority. acceptable as long as BAMBOO is aware of and consents to Au-Yeung establishing and working for Priority as a separate entity. III. acceptable as long as Priority clients are not negatively affected by Au-Yeung's prior purchase of China-Pin securities through his account at BAMBOO. IV. unacceptable. I. Which CFA Standard(s) of Professional Conduct do(es) the case relate to? II.
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 14DQ
Related questions
Question
Transcribed Image Text:1. Au-Yeung is a research analyst at BAMBOO, a registered broker/dealer and investment adviser. While
employed with BAMBOO, Au-Yeung established Priority Trade Investments Limited and acts as that firm's
investment adviser. Au-Yeung is responsible for formulating Priority's investment strategy and directs all
trades on behalf of Priority. Over the course of several days, Au-Yeung purchases 50,000 shares of China-
Pin stock and 1,978 China-Pin call options for his personal account at BAMBOO. Shortly thereafter, Au-
Yeung uses $29.8 million of Priority's funds to purchase more than 3 million shares of China-Pin stock.
A) Please discussion the following:
• Which CFA Standard(s) of Professional Conduct do(es) the case relate to?
B) Explain whether each of I, II, III & IV below is correct or incorrect separately with respect to the relevant
Standard. State the key points of the case that relate to the relevant Standard in your own words.
Au-Yeung's actions are:
acceptable because Au-Yeung's personal investments are not in conflict with the investment advice
being given to his clients at Priority.
acceptable as long as BAMBOO is aware of and consents to Au-Yeung establishing and working for
Priority as a separate entity.
III. acceptable as long as Priority clients are not negatively affected by Au-Yeung's prior purchase of
China-Pin securities through his account at BAMBOO.
IV. unacceptable.
I.
II.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning