Question

On the drive into the city Sharif, an experienced investment advisor, hears that Tim Hortons' is about to open 50 stores in Mexico. He thinks this is encouraging news and decides to buy 1,000 shares as soon as he gets into work. As he unlocks his office door, his phone rings. It is one of his smaller clients and she wants to buy 2,000 shares, having heard the same news report. What action should Sharif take when entering these orders?

1) He must enter his client's order for the shares before he enters his own order.
2) He must enter the order for her shares at the same time as he enters his order.
3) He can enter his order first as she is not an important client that must be dealt with immediately.
4) He can't enter an order for himself for shares in a company that one of his clients wants to buy.

Answer 1

Sharif must enter his client's order for Tim Hortons' shares before his own to adhere to professional and ethical standards.

Step-by-step explanation:

Sharif, as an experienced investment advisor, must adhere to ethical and professional standards which dictate that the interests of his clients come before his own. The action Sharif should take when entering these orders is: 1) He must enter his client's order for the shares before he enters his own order. This is in keeping with the industry's best practices and the legal obligations that prioritize client interests above those of the advisor's personal gains. Not entering his client's order first could potentially be a violation of securities regulations and professional codes of conduct, which uphold principles such as fairness, integrity, and putting the client's interests first.