Explanation

According to the CFA Institute's Code of Ethics and Standards of Professional Conduct, specifically Standard IV(C): Responsibilities of Supervisors, when a supervisor discovers a violation or wrongdoing by an employee, they should:

1. Take immediate action to limit the potential harm
2. Place appropriate limitations on the wrongdoer's activities pending the outcome of an investigation
3. Increase supervision of the employee during the investigation period

Let's analyze each option:

Option A: Avoid increasing supervision of the wrongdoer until the investigation is concluded - This is incorrect. Supervisors should actually increase supervision during the investigation to prevent further violations.

Option B: Place appropriate limitations on the wrongdoer pending the outcome of the investigation - This is correct. This is a key requirement under Standard IV(C) to prevent further harm while the investigation is ongoing.

Option C: Rely on an employee's statement about the extent of a violation of the law if the employee gives written assurance that the wrongdoing will not reoccur - This is incorrect. Supervisors cannot simply rely on an employee's assurances; they must conduct a proper investigation and take appropriate action regardless of the employee's promises.

The correct approach involves a combination of limiting the employee's activities, increasing supervision, and conducting a thorough investigation to determine the appropriate disciplinary action.