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Answer: Yes, by initially allocating IPO shares to the firm's proprietary account
## Explanation Buckley's actions violate the Standard related to priority of transactions by initially allocating IPO shares to the firm's proprietary account. **Key Principles:** - The Standard on priority of transactions requires that client transactions take precedence over personal transactions and firm proprietary transactions - When allocating limited investment opportunities (such as oversubscribed IPOs), investment professionals must: - Give priority to client accounts over personal and firm accounts - Allocate shares in a fair and objective manner **Violation Analysis:** - **Allocating to firm's proprietary account first:** This violates the Standard because client accounts should receive priority over the firm's proprietary account - **Allocating to father's account:** This action does NOT violate the Standard because: - The father's account is a standard fee-paying client account - It was allocated at the same time as other client accounts - There is no indication of preferential treatment or violation of fair allocation principles Therefore, the violation occurs only in the initial allocation to the firm's proprietary account before client accounts.
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Derek Buckley, CFA, is a portfolio manager. When allocating oversubscribed IPO shares, Buckley initially allocates shares to his firm's proprietary account based on his loyalty to his employer. He then allocates shares to his father's standard fee-paying account at the same time as other clients' fee-paying accounts.
Do Buckley's actions violate the Standard related to priority of transactions?
A
No
B
Yes, by initially allocating IPO shares to the firm's proprietary account
C
Yes, by allocating shares to his father's account at the same time as other clients' accounts
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