Kazuya, a CFA at a global investment bank, issues a forecast and secretly sells the report to a website. He also emails portfolio managers indicating his forecast will reverse shortly to create trading opportunities. Which CFA Institute Standard did he least likely violate?

• A. Market Manipulation
• B. Priority of Transactions
• C. Additional Compensation Arrangements
• D. Loyalty

Answer: (B)

This question tests understanding of CFA Institute Standards related to market manipulation, conflicts of interest, and loyalty to clients. Selling a forecast report to a third party and telling portfolio managers that the forecast will reverse to spark trading are actions aimed at influencing the market for personal gain, which violates Market Manipulation and signals a conflict of interest that falls under Additional Compensation Arrangements. It also breaches Loyalty because it places personal gain ahead of clients’ interests. However, Priority of Transactions concerns giving priority to client orders over personal or firm trades and avoiding front-running; there’s no clear indication that he traded ahead of clients or manipulated order flow. Therefore, this standard is the least likely to be violated.