Troubled in Virginia

by StockJockey

Thursday, March 08, 2007 - 4:15 pm

The CFA Institute has long held itself and its members to a higher standard. The recent trading scandal is no laughing matter in Charlottesville:

“Our organization is deeply troubled about the impact these ethics-related allegations have on investor trust,” said Jeff Diermeier, CFA, president and CEO of CFA Institute, the organization that administers the Chartered Financial Analyst® (CFA®) designation. .

An individual snared in the trading ring last week was once a member of the CFA Institute...and they are apparently exploring ways to punish him above and beyond whatever securities regulators will dole out:

Diermeier added that “we were outraged and dismayed to learn that one of the named individuals – Erik Franklin – was once a CFA Institute member. Even though Franklin never completed the requirements to receive the CFA designation, CFA Institute takes this very seriously. Our disciplinary program does not presently cover those who are no longer members, a matter our Board of Governors will soon be reconsidering. When events as egregious as this occur, our industry needs to take a hard look in the mirror and ask whether it is still able to police itself or will there be more government regulation.” Diermeier continued, saying that when the “gatekeepers” are part of the problem, as was the case here, penalties should be severe because of their added responsibility for building a culture of trust in the capital markets.

Although Wall Streeter’s routinely spend 14-hour days putting out fires, they will soon have to squeeze in more time for training as Charlottesville rolls out a new program:

CFA Institute promotes ethics with great concern for the needs of the industry, recently developing a comprehensive, practice-based training program for investment firms. The program is in the early stages of roll-out. Ethics and professional conduct have also been an important component to the CFA Program throughout its 44-year history.CFA Institute
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