Knowledge of the Law
(
Script )
Narrator: We
will be presenting the three highlights regarding the knowledge of the law.
First is the relationship between the Code and Standards and Applicable Law.
First Scenario: An investor approaches the
CFA Institution and hires a financial analyst to analyze her business. The
hired CFA and the client reside in a country with a more strict security laws
and regulations, but do business in less strict laws and regulation. Thus, the
more strict laws and regulations are adhered for it states that the law of the
client’s home country governs.
(Investor
and the hired CFA having their conversation)
Client
1:
(enters the office) Hi, I’m Paula and you’re Ana right?
Ana:
(standing) Yes, nice to meet you maam. (shakes hand)
Client 1:
(sitting down) Ana, I’ll be straight to the point. As the most experienced CFA
in your institution, I’m here to offer you 1 million pesos as payment for your
service, but I want you to do the business following the security laws and regulations
in this country where we conduct business as of right now for it is less
strict.
Ana: But
maam, it is against the law. I can’t do that. We should follow the more strict
security laws and regulations of your hometown for it states that law of the
client’s home country must be adhered.
Client
1: So, you mean you are declining my offer?
Ana:
Thank you for your offer maam, but I’m sorry I don’t agree with your decision,
I must adhere to the laws and regulations being stated as a CFA and the fact
that I’m one of the experienced CFA, my reputation would be ruined.
Client 1:
Okay. I’m easy to talk to, I’ll just look for another CFA who is willing to do
the job and offer them your pay.
Ana:
Goodbye maam.
Narrator: Second
highlight is participation in or association with violations by others. Second
scenario: After a month of successful job. Client 1 hadn’t found a more
experienced analyst than Ana, so she decided to call her back and again offer
her the deal that they had talked about before.
(Ana’s
phone rings)
Client
1: Hi Ana, I just want to let you know that I’m offering
you again the 1 million salary in exchanged of doing the analysis of my
business in this country which is not strict regarding with the laws and
regulations of security.
Ana: But
why me?
Client
1: You’re the only one person that fits to do this job
Ana, you are the best among the rest. I know you need money as of the moment
and I’m here offering you more than enough compared to your current salary.
Ana:
Okay fine, meet me in my office tomorrow morning.
(Morning)
Client
1: (enters the office) So Ana, what’s your plan? Never
thought of declining my offer right?
Ana:
Ms. Paula, don’t think of anything else, I’ll just be doing this for the first
and the last time, I really am in a dire need of money lately.
Client
1: As what we have talked about before, I want you to conduct your analysis in
this country which is less strict security laws and regulations and understate
my profit for me to pay a lesser amount of tax. That’s all you have to do dear,
we’ll just stay connected with each other while we are on this project, okay?
Bye!
Narrator:
Eventually Ana gave in with the client’s offer due to the fact that her career
isn’t in demand anymore. Furthermore, Ana had to look for another client for an
additional income. And luckily!
(Client
2 enters the office of Ana)
Client
2: Hello, you’re Ms. Ana right? Well I’ve heard a lot of
positive feedbacks about you. So, I’m offering you a 500 thousand salary for
your service in return for you to make a report regarding financial matters of
my company that you will finish making in just a week.
Narrator:
Finally Ana, both accepted the deal which violates the code of ethics stated
being a CFA.
(In
the middle of the project)
Client
2: (Calling Ana) Hi Ana, I just want to remind you that
you have to submit the report at the end of this week. Okay?
Ana:
Okay maam, it will be ready in no time.
Client 2:
Good.
Ana:
Have a good day maam. Bye!
(Ana
in sudden realization)
Ana:
OMG! What have I have done? I know it’s
not right to handle things this way. I know I could earn instant money by
having these two projects, I just can’t take it I need to do something.
Narrator:
In order to lessen her burden Ana decided to report her wrong doings to the CFA
Institution
(Ana
went to counselor’s office)
Counselor:
Ms. Ana, I am very disappointed of your action. You know, in every unethical
behavior has a corresponding consequence and your decisions are very
questionable. The council is not happy with it so we are sorry to inform you
that we have to do what is right, to terminate your title as a certified
financial analyst. I’m really sorry.
Ana; It
is okay sir I accept the punishment, for in the first place it’s my fault.
Narrator:
The Ana catastrophe serves as a warning for the head of the CFA Institution to
respond immediately by conducting a meeting.
Head
of CFA: The purpose of this meeting is to remind you how a CFA should behave,
we are very affected by the recent catastrophe that Ana brought which is named
after her. As a CFA, you are expected to be knowledgeable with the applicable
laws- foreign and regional. As to where the investment products to be developed
to be distributed to clients and the reports to be analyzed. Each one of us
must always be stay informed – what changes established laws or regulation are
being made. We must review the handbook from time-to-time maintains readily
accessible copies of important files. When doubting as to what appropriate
actions to undertake one must seek the advice of the legal counsel. When
dissociating from a current activity one may have to resign his or her
employment. Each firm must consider the following policies and procedure to
support the principles of
Standard
I-A:
·
Develop and Adopt the Code of Ethics
·
Provide Information on Applicable Laws
·
Established Procedures for Reporting
Violation
The
business industry is looking forward for us to correct and not to make the same
mistakes again.
Meeting
Adjourn
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