Ethics Violations in Carlos' Actions

Carlos recently attended a seminar on a new technique in identifying possible relative mispricings amongst stocks. Impressed by the presentation, he used the technique to suggest that two of his biggest clients rebalance their portfolios with a heavier emphasis on the stocks the technique identified as being mispriced.

While presenting this suggestion to his clients, Carlos did not mention anything about the source of the ideas used. Before recommending the changes, he did not personally check the results nor did he try to find out if there were any significant caveats or assumptions associated with the methodology. He has:

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

II. violated Standard II (C) - Prohibition against Plagiarism.

III. violated Standard IV (A.1) - Reasonable Basis & Representations.

IV. violated Standard IV (B.1) - Fiduciary Duties.