Reference no: EM133079893

Question - Ethics Case: Sandra Cunningham Sandra Cunningham, a CFP professional, has been providing Joseph Fullerton, age 90, with financial planning advice for over 20 years. She is also a Registered Representative under IIROC and is therefore able to implement his investment plan. Joseph's investment objectives are 10% growth, 60% income, and 30% preservation of capital (safety). Joseph has complete trust in his son Edward who is an investment banker, so he always includes him in meetings with Sandra. Although Joseph has not been willing to relinquish control over his investments to his son, Sandra finds it easier to call Edward to discuss changes in his father's investments. Joseph has never questioned this practice. Sandra has received some very valuable investment tips from Edward who specializes in renewable energy companies with promising technology. He seeks to bring these private companies public via an IPO. Due to her lack of knowledge in this area, Sandra defers to Edward in selecting these types of investments for Joseph's account and her own. Her faith in Edward is based on his reputation in the industry. However, Joseph is unaware that she has invested in the same renewable energy securities that he holds. At one point, Sandra erred when entering an order in Joseph's account for a renewable energy stock recommended by his son by purchasing more shares than he desired. She corrected the error by transferring the excess shares to her own account and transferred cash from her account to Joseph's to pay for them. Sandra informed Joseph of the error assured him that he did not suffer a loss but did not disclose how she fixed the error. Recently, the research department at Sandra's firm put out a report highlighting the fact that renewable energy stocks, having benefited from the environmental movement, were vastly overvalued. Sandra sold her holdings but did not advise Joseph to do the same; she assumed he would be guided by his son. Sandra was silent on the matter also because she did not want to insult Edward's expertise, which might cause her to lose Joseph's business and therewith access to Edward's investment ideas. As the months went on, renewable energy stocks continued to soar. Sandra reflected that she had done the right thing by not rocking the boat with Joseph and Edward. After all, Joseph had done well by Edward's recommendations.

1. Based on the case above, what action should the certificant have taken in the chosen case to ensure compliance with FP Canada's Code of Ethics or Rules of Conduct? Consider whether the certificant could have achieved the business objective in a compliant way or whether the certificant should have completely avoided the business activity.

2. Assume you sit on FP Canada's Conduct Review Panel. What sanction(s) (if any) would you recommend in this case, and why?