A member discloses only favorable risks in a report and omits material risks. Violation?

• A. Standard I.C Misrepresentation
• B. Standard II.A Material Nonpublic Information
• C. Standard VI.A Disclosure of Conflicts
• D. Standard IV.B Fair Dealing

Answer: (D)

Fairness in presenting information to clients is the key idea. When a member issues a report that highlights only favorable risks and leaves out material risks, the information becomes biased and misleading. Clients rely on you to provide a complete, balanced view so they can make informed decisions; omitting significant risks denies them that basis and unfairly tilts the view in favor of the investment. That kind of selective disclosure violates the obligation to deal with clients fairly by presenting information in a complete and unbiased manner. While misrepresentation covers false statements, the core issue here is the lack of fair, complete disclosure to the client, which is exactly what the fair dealing standard prohibits.