Can someone walk through a realistic CFA ethics case study? I need practice identifying violations.

Here's a multi-layered case study similar to what you'll see on the CFA Level I exam.

Case Study: Nakamura at Horizon Capital

Suki Nakamura, CFA, is a senior analyst at Horizon Capital. Consider the following actions she takes over one week:

Monday: Suki completes her analysis of Ridgeline Tech and concludes it's significantly undervalued. Before publishing the research report, she buys 500 shares in her personal account.

Violation: Standard VI(B) — Priority of Transactions (Front-Running)

Suki traded for her personal account before disseminating the recommendation to clients. Client transactions must come first.

Tuesday: Suki publishes the Ridgeline Tech buy recommendation. However, she only sends it to her firm's five largest institutional clients and waits three days before distributing to the remaining 40 retail clients.

Violation: Standard III(B) — Fair Dealing

All clients should receive investment recommendations at approximately the same time. Giving institutional clients a three-day head start is unfair.

Wednesday: A board member of Cascade Electronics (a company Suki covers) calls to say they're acquiring a competitor. The deal will be announced Friday. Suki thanks him and updates her earnings model to reflect the acquisition.

Violation: Standard II(A) — Material Nonpublic Information

The acquisition is material and nonpublic. Suki should not use it in her analysis until publicly announced. She should contact compliance immediately.

Thursday: Suki refers a client to a tax attorney who pays Suki $300 per referral. She does not mention this fee to the client.

Violation: Standard VI(C) — Referral Fees

Suki must disclose the referral fee arrangement so the client can assess whether the referral is biased.

Friday: At a networking event, Suki introduces herself as "Suki Nakamura, CFA, who passed all three levels on the first try."

Violation: Standard VII(B) — Reference to CFA Designation

Implying superiority by mentioning "first try" is not permitted.

Exam approach for ethics cases:

1. Read the entire scenario first
2. Identify each distinct action
3. Map each action to a specific standard
4. Check if the action violates or complies with that standard
5. Pick the answer that correctly identifies the standard AND the violation

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