Question

Simon Layman is a trust investment officer at a bank in a small affluent town. He enjoys lunching every day with friends at the country club, where his clients have observed him having numerous drinks. Back at work after lunch, he clearly becomes somewhat intoxicated because of his drinking habits and has affected his investment decision-making. His colleagues make a point that Simon handles business with his client in the morning because they distrust his judgment after lunch.

Required:
Based on the above scenario, discuss on Simon’s professional conduct and the impact on his employer and investment industry in general by applying the CFA Standards of Practice Handbook. ( 10 marks )

Answer 1

Professional conduct is an important part of any professional. It is important to adhere and obey the code of conduct in which a particular individual is working.

Professional conduct can be defined as a regulation that every active member of professional body has to follow either by law or by contractual obligations.

For instance, professionals like doctors, lawyers, and many others have to abide by the code of conduct.

In the given case, Simon Layman a trust investment officer who has indulged himself in a habit of drinking at work during lunch. Because of this habit, clients prefer to meet him before lunch and not after lunch as he is drunk after it.

According to the CFA Standards of Practice Handbook, a similar case has been described under the heading of violation of Standard I(D). It states that as Simon Layer is drinking at lunch and subsequently intoxicated at work has violated code of conduct. This behaviour has raised questions about professionalism and competence. His behaviour reflects poorly on him, his employer and the investment industry.

Recommended procedure for compliance:

!) Develop a code of conduct to which every employee should abide, and make it clear that any behaviour that reflects poorly on the firm, the member, and the industry would not be tolerated.

2) A list of violation should be prepared and any person who violates the list should be fired.

3) Check references of potential employees to check whether they are of good character or not.

In a nutshell, it is violation of Standard I(D) according to the CFA Standards of Practice Handbook and it reflects poorly on His Company, and the industry as a whole.