FIN 800 Lecture Notes - Lecture 6: Arthur Andersen, Ronald Coase, Ronald Wayne
Document Summary
Your firm is managing a rules based index fund. While performing the review for a quarterly rebalancing, you realize that the firm should have included an equity holding during the previous rebalancing. That equity security"s value increased by nearly 20% in the previous quarter. If that security had been included, the fund would have been up an additional. You mention this to your superior and he says, thanks. It has been one week since you found the discrepancy. The portfolio was rebalanced and this equity security was still not included. Do you take any additional actions: clients interest come first the shareholders (main, huge conflict of interest liability and someone getting fired o. Spoke to the supervisor is a good thing: alternative action follow up with the supervisor, talk to the board, speak to the compliance team. Reviewing compensation and promotion practices: high fee products, culture is subjective.
