Financial Risk Manager Part 1

The GARP Code of Conduct, under the section of Professional integrity and ethical conduct, stipulates that members must avoid any form of deceit in assessments, measurements, and processes that are intended to provide a business advantage at the expense of honesty and truthfulness. In the given scenario, Sally Spicer and Prime Financials have violated this section by issuing misleading financial information to boost investor confidence. This action is a clear contravention of the principles of honesty and truthfulness, as it presents the clients in a better financial state than they actually are. The intention behind this action is to gain a business advantage, which is explicitly prohibited under this section of the GARP Code of Conduct. Therefore, the most likely section of the GARP Code of Conduct that has been violated by Spicer and her company is Professional integrity and ethical conduct.

Choice A is incorrect. Best practices refer to the recommended methods and strategies in risk management that are accepted as superior to others because they produce results that are superior to those achieved by other means. In this case, Sally Spicer is not breaching best practices but rather she is engaging in unethical conduct by releasing misleading financial data.

Choice C is incorrect. Fundamental responsibilities refer to the basic duties of a risk manager such as maintaining professional competence, acting with integrity, and serving clients with diligence and objectivity. While Spicer's actions may be seen as a breach of these responsibilities, her actions more directly violate the principle of professional integrity and ethical conduct.

Choice D is incorrect. Confidentiality refers to the obligation of professionals to protect sensitive information from unauthorized disclosure. In this scenario, there's no indication that Spicer or Prime Financials have disclosed confidential information without authorization.