A fund manager included in marketing materials historical performance from a previous employer. He had permission to take the data and supporting research reports. He did not have the underlying performance data to support the historical returns. Which CFA Institute Standard is most likely violated?

A fund manager included in marketing materials historical performance from a previous employer. He had permission to take the data and supporting research reports. He did not have the underlying performance data to support the historical returns. Which CFA Institute Standard is most likely violated?

• A. Loyalty
• B. Ethics Marketing
• C. Record Retention
• D. None

Answer: (C)

The main idea here is that performance communications must be backed by verifiable data and maintained with proper records. When a fund manager presents historical performance in marketing materials, there must be a clear, auditable trail showing how those figures were calculated, what data were used, and the sources. The CFA Institute standard that covers this is the requirement to retain adequate records to substantiate performance presentations. In this scenario, the manager did use data from a previous employer, with permission, but he did not have the underlying performance data to support the historical returns. Without the underlying data or a maintained trail showing how the returns were derived, there’s no way to verify the accuracy of the figures. That lack of documentation to back up the performance claims violating the Record Retention standard, which is why this is the best answer.

The main idea here is that performance communications must be backed by verifiable data and maintained with proper records. When a fund manager presents historical performance in marketing materials, there must be a clear, auditable trail showing how those figures were calculated, what data were used, and the sources. The CFA Institute standard that covers this is the requirement to retain adequate records to substantiate performance presentations.

In this scenario, the manager did use data from a previous employer, with permission, but he did not have the underlying performance data to support the historical returns. Without the underlying data or a maintained trail showing how the returns were derived, there’s no way to verify the accuracy of the figures. That lack of documentation to back up the performance claims violating the Record Retention standard, which is why this is the best answer.