Finance Ethics: Identify The Conflict, Individual, Decision To Be Made

Instructions for Ethics Essay
Paper 500-600 words.
Choose one of two vignettes listed below.
Use this 7-step framework for each situation:
Identify the conflict (role of individual, decision to be made)
Identify the relevant facts (urgency, who will be impacted, how big will the benefit be, how big will the cost be to the decision maker, how big will the impact be to the capital market participants)
Do I know enough or should I do more fact gathering? Should I ask my supervisor for guidance?
What are range of decisions that I could make? Elaborate these in considerable detail.
What do CFA Standards of Professional Conduct say to do? Does more than one apply? Which one should prevail?
Make the choice and say why.
How will you implement the action: write a letter, make a phone call, what will you say?
Refer to the CFA readings for clarification on the seven Standards of Professional Conduct or to the powerpoint summary of the Standards.
1.)Dan Noelle, a telecom company analyst for CTO Securities, issued a memo to be included in CTO's morning email to the firm's clients:
“Rumors that Descend Communications will announce first quarter results as much as 3 cents per share better than consensus projections of 44 cents because of strong domestic orders and good expense control. We have upgraded our rating to BUY from HOLD and have raised our 12-month price target to 70 from 65.”
Dan justified his rating upgrade by saying that the “whisper number” had been circulating for some time. Descend's lower tax rate from operations in Ireland might be the reason why. He had also read a message in a chat room that the company was close to booking a huge new order in Europe. He was willing to take a chance that the company had a good shot at beating the consensus estimate and his own earlier estimate.
2.)Jeffrey Reynolds is a mining analyst for North Shore Securities. He has just finished his report on Hanover Gold Mines. Included in his report is his own assessment of the geological extent of mineral reserves likely to be found on the company's land. Jeffrey completed this calculation based on the core samples from the company's latest drilling. According to his calculations, the company has in excess of 500,000 ounces of gold on the property. Jeffrey concludes his research report as follows: “Based on the fact that the company has 500,000 ounces of gold to be mined, I recommend a strong BUY.”
To simplify the report, he decides to leave out details of the derivation of the earnings estimate and of the valuation model linking Hanover's earnings forecasts to his opinion.