Oliver's Ethical Dilemma in Acquisition Analysis

Very Hard Professional Standards Application Ethical Decision-making

Oliver is a senior analyst at a global investment firm and a CFA charterholder. He is assigned to evaluate the potential acquisition of a biotechnology company that is currently in the process of significant clinical trials. During his analysis, he discovers that a relative of his close friend holds a substantial stake in the biotechnology company, which could influence the acquisition outcome. To further complicate matters, Oliver's firm has a vested interest in acquiring companies within the biotech sector due to their growth potential.

Faced with this situation, Oliver must decide how to proceed with his analysis while adhering to the CFA Institute's Code of Ethics and Standards of Professional Conduct. He recognizes the importance of avoiding conflicts of interest and upholding professional integrity while still executing his job responsibilities.

Which of the following actions should Oliver take to best adhere to professional standards while making his decision?

Oliver should disclose the potential conflict of interest to his compliance department and recuse himself from the analysis.

Oliver can proceed with his analysis but must ensure that his findings are based solely on objective data regardless of his personal connections.

Oliver should avoid any discussion about the acquisition with his friend to eliminate personal bias from his analysis.

Hint

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