Ethical Dilemma: Reporting Supervisor's Unethical Request

Medium Cfa Institute Code And Standards Professionalism - Misconduct

During a quarterly review meeting, a financial analyst, Alice, is approached by her supervisor, James, who suggests that Alice should manipulate the performance data of a fund to make it appear more favorable to clients. James argues that this practice is common in the industry and could improve the firm's image and client retention.

Alice feels uncomfortable with this suggestion, knowing that misrepresenting performance would violate ethical standards as outlined in the CFA Institute's Code of Ethics and Standards of Professional Conduct. However, she also recognizes the pressure from her supervisor to conform to what seems to be an acceptable practice.

What should Alice do in this situation to uphold her professionalism and ethical standards?

Alice should comply with her supervisor's request, as it is a common practice in the industry.

Alice should report her supervisor's suggestion to the compliance department and refuse to engage in unethical practices.

Alice should document the conversation and seek advice from colleagues before deciding on any further action.

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