Q1. Fanky Quattro, CFA and portfolio manager of You Can Trust Us (YCTU) mutual fund and individual portfolio management services recently received a call from one of the brokers covering his account.The broker had 25,000 shares of an initial public offering that was priced at $13 dollars a share and opened for trading at $30.The broker said to Fanky "I'm glad to get these to you, but we expect you to buy more shares in the aftermarket to support the stock.And we also strongly suggest that you take a hard look at our other investment banking deals if you want to continue getting allocations like this."

Based on the information above, Fanky decides to put the entire allocation into his largest three clients so that each one gets a 1% position.He decided to allocate the shares this way because the position would be too small to impact the mutual fund.

Questions: Has Franky violated any CFA institute or other applicable finance ethics policies? Please elaborate.

Q2Jamie is asked by the research director to cover EG, a large consumer products manufacturer located in the U.K.She remembers that one of her graduate school classmates works as an analyst in London and gives him a call.It turns out that he has just written an extensive report on EG and has given the stock a strong buy rating.He offers to fax a copy to Jamie so that she may learn more about EG.After reviewing his conclusions and getting basic information on the company from the EG company website, she too concludes that the stock is a strong buy and writes a brief report including the model of her classmate.She decides it is not necessary to do further research because her friend works for a large investment firm known for their thorough research.And, since the firm's reports are widely disseminated and used, she believes she does not need to get permission to incorporate the model into her work. Which of AIMR's Code and Standards have been violated? Please discuss and elaborate.

Q3.

A large group of portfolio managers and analysts meet once a year for an investment conference at a fancy hotel to get educated wined and dined by a brokerage firm.The host firm pays for meals, entertainment, expensive wine, and the hotel suites.At this meeting, breakout sessions are provided for the brokerage firm's top clients with senior management of publicly traded companies presenting at the conference.

At one of these breakout sessions, an analyst named Tommy Toy, CFA overhears the CEO of Reardon Steel talking into his cell phone before the meeting begins.The CEO said "I can't say anything right now because I have a room full of Wall Street jerks breathing down my neck.But if they want to buy our firm for that much money, get the board together and we will meet tomorrow morning at corporate headquarters.Send the jet out to get me tonight."

After hearing this conversation, Tommy gets his own cell phone out and proceeds to call in an order to by several thousand shares of Reardon Steel for his personal account. Can Tommy trade on the overheard information? Please discuss and elaborate.