Discussion and Analysis

Dilemma $1$: Conflicts of Interest

Huda is offered tickets to an exclusive industry conference by a broker who handles a significant portion of her trades. The broker hints that more favorable trading terms may follow if she accepts the invitation.

Dilemma $2$: Material Nonpublic Information

Huda learns from a friend, who is an executive at a company in her portfolio, that the company will soon announce a major product recall. Acting on this information could lead to significant gains for her clients.

Dilemma $3$: Communication with Clients

Facing a market downturn, Huda is concerned about maintaining client confidence. She contemplates selectively disclosing positive news about certain holdings to reassure clients, even though not all positions are performing well.

Explain and illustrate in detail the ethical and responsibility considerations for the Huda by relating your answers to the CFA Code of Ethics and Standards of Professional Conduct.