Prioritizing Transactions: Ethical Standards

Medium Cfa Institute Code And Standards Conflicts - Priority Of Transactions

Michael, a financial analyst, is reviewing his investment transactions at the end of the year. He has personal investments in some of the companies he covers. Recently, he received a highly regarded buy recommendation on a stock from a research firm, and he immediately executed a buy order for this stock for his personal portfolio.

Later, he published a research report suggesting others buy the same stock, but he failed to disclose his personal transactions. In this scenario, how should Michael have prioritized his transaction to align with the CFA Institute Code of Ethics and Standards of Professional Conduct regarding conflicts of interest?

He should prioritize his personal transactions over client transactions as they are his own investments.

He should prioritize client transactions over his personal transactions and disclose his conflict of interest.

He can choose either to prioritize his personal transactions or client transactions equally without any disclosure.

Hint

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