Answer: Yes, by failing to inform her firm's compliance department about her colleague's activity

## Explanation Julia Stevens **has violated** the Standard relating to loyalty, specifically by **failing to inform her firm's compliance department about her colleague's activity**. ### Key Standards Analysis: - **Standard IV(A): Loyalty to Employer** requires members to act for the benefit of their employer and not deprive the employer of the advantage of their skills and abilities - **Standard I(A): Knowledge of the Law** requires members to understand and comply with applicable laws, rules, and regulations ### Application to the Scenario: #### Violation - Colleague's Trading Activity: - Stevens observed her colleague engaging in potential market manipulation (exploiting price differences across exchanges) - This activity could constitute illegal trading practices - Despite the firm having no specific employee trading policy, Stevens had a duty to report potentially illegal activities to her compliance department - **Failure to report** this activity violates her duty of loyalty to her employer #### No Violation - Brokerage Fees: - Stevens **correctly refused** to pay unjustifiably high brokerage fees - **Standard III(A): Loyalty, Prudence, and Care** requires members to act for the benefit of clients - Paying excessive fees without sufficient client benefit would violate her duty to clients - Her refusal to comply with this improper request was appropriate ### Conclusion: Stevens violated her duty of loyalty by failing to report her colleague's potentially illegal trading activity, which could expose the firm to regulatory and reputational risk.

Author: LeetQuiz Editorial Team