O’Reilly is chief financial officer of Global Strategic Partners (GSP), a global investment adviser thatmerged with Holland Advisers, a smaller regional investment adviser. As a result of the merger, GSP becomes the adviser of record for several thousand Holland clients. For a period following the merger, GSP maintains Holland’s legacy billing system for original Holland clients until those clients can be converted to GSP’s billing system and platform. When the Holland billing system is converted, O’Reilly reviews the client billing information to ensure that it is correctly copied into the GSP billing system. Unbeknownest to O’Reilly, Holland’s billing system has a number of billing inaccuracies. For instance, Holland’s billing system inadvertently causes client advisory fees to default to the highest available account fee when client accounts in one advisory program are transferred between branches. Also, Holland’s billing system charges outside manager fees on assets that are held in money market accounts that do not use an outside manager. Finally, Holland’s billing system does not reimburse advance-billed fees when clients terminate their accounts. Some of these fee billing errors resulted from coding or other systems errors, whereas others were caused by administrative errors, including the failure of Holland personnel to immediately input negotiated lower fee rates into the billing system.

Required:

Considering CFA Ethical Standards I through Standards IV, which of these, if any, may O’Reilly be violating? What are O’Reilly’s ethical responsibilities to clients?

Answer rating: 100% (QA)

The CFA ethical standards that OReilly may be violated in this case are the standards of professionalism and integrity of the capital markets the stan... View the full answer