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B. Communication with Clients and Prospective Clients.
#analyst-notes #code-of-ethics-and-standards-of-professional-conduct #v.-investment-analysis-recommendations-and-actions
Example 1

To simplify his report, an analyst leaves out details of the valuation models. He violates this standard because clients need to fully understand the analyst's process and logic in order to implement the recommendation.

Example 2

An analyst issues a "buy" recommendation on a stock, mainly based on his optimistic assessment of the company's operation. He violates this standard by failing to distinguish between opinions and facts; his optimistic assessment of the company is his own opinion.

Example 3

An analyst issues a report promoting a firm's new investment strategy. The report stresses the likelihood of high returns. However, it does not describe the strategy in detail. The analyst violates this standard because his report fails to describe properly the basic characteristics of the investment strategy.

Example 4

An analyst has a duty to gather information about a company in order to make fully informed recommendations about it. As a result, the analyst is required to ask the management of the company to review his research report for inaccuracies. The analyst still has a duty to examine and verify the information presented to him by the company he is examining.
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