
Answer-first summary for fast verification
Answer: No, because Kato should take steps to ensure the violation is not repeated
## Explanation Kato's actions are **not** consistent with the Standard relating to responsibilities of supervisors. Here's why: ### Standard IV(C) - Responsibilities of Supervisors Under this standard, supervisors must: 1. Make reasonable efforts to detect violations of applicable laws, rules, regulations, and the Code and Standards 2. Take immediate action upon discovering a violation to prevent further violations ### Where Kato Failed - Kato properly initiated an investigation and reported the misconduct up the chain of command - However, **Kato failed to take adequate steps to prevent repeated violations** while waiting for the investigation outcome - Merely warning the employee to cease the activity is insufficient - supervisors must implement additional controls or monitoring to ensure compliance ### Correct Action Kato should have taken additional measures such as: - Increased supervision of the employee's activities - Temporary restrictions on the employee's responsibilities - Enhanced monitoring systems - Additional training or guidance The fact that Kato took "no further steps" while waiting for the investigation outcome violates the requirement to prevent repeated violations.
Author: LeetQuiz Editorial Team
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Hiroshi Kato, CFA, is a supervisor at an investment management firm. Kato learns one of his employees may have violated the Standards. Kato promptly initiates an investigation to determine the extent of the potential wrongdoing and concludes that the employee violated the Standards. Kato then reports the misconduct up the chain of command and warns the employee to cease the activity. While waiting for the outcome of the investigation, Kato takes no further steps to prevent repeated violations.
Are Kato's actions consistent with the Standard relating to responsibilities of supervisors?
A
Yes
B
No, because Kato should take steps to ensure the violation is not repeated
C
No, because Kato should report the violation to the Professional Conduct Program
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