Corporate Associate's Business Proposal for Underwriting Needs: Research Coverage for White Papers Inc.

Corporate Associate's Business Proposal

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Question

Marmella is a corporate associate with an investment banking firm, Corpfins. She recently put together a business proposal which would allow Corpfins to take on

White Papers Inc., a producer of premium printing paper, as a business client for all its underwriting needs. In this proposal, Marmella has promised that her team will provide full research coverage for White Papers, with the clause that the team will not be the first on the street to release a "sell" recommendation. Marmella has

Answers

A. violated Standard IV (A.3) - Independence and Objectivity.

B. violated Standard IV (A.1) - Reasonable Basis and Representations.

C. not violated the AIMR code of ethics.

D. violated Standard II (B) - Professional Misconduct.

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Explanations

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A. B. C. D.

By agreeing to a clause that prevents her from releasing an objective research report under all circumstances, Marmella has violated Standard IV (A.3) -

Independence and Objectivity - because not only is there an appearance of impropriety and conflict of interest, but the contract clearly hinders Marmella's judgment.

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