Put the Misrepresentation standard, I(C), into practice
The idea
Members must not knowingly make any misrepresentation relating to investment analysis, recommendations, actions or other professional activities. This covers guaranteeing a return on an inherently volatile investment, overstating qualifications or the scope of services, and plagiarism — using another's work without attribution, including charts, models and language from research reports. Recognised statistical or factual sources may be used without citation, but a colleague's or a competitor's analysis may not be presented as one's own. Omission can misrepresent as effectively as a false statement.
A practice question
Which action violates Standard I(C)?
- Guaranteeing a specific return on an equity fund — correct
- Describing the historical volatility of a fundWhy not: A factual account of what the fund has done is the kind of disclosure the Standard exists to protect.
- Disclosing that past performance may not repeatWhy not: A warning against over-reading a record is the opposite of a misrepresentation.
Standard I(C) Misrepresentation prohibits any statement that misleads about an investment or a member's services. A return on a volatile instrument cannot be guaranteed, so presenting one as certain misstates the investment itself.
A harder one
An analyst reproduces a competitor's chart in their own report without attribution. Is this a violation?
- No, if the chart uses publicly available dataWhy not: The data may be public while the work of selecting and presenting it is the competitor's.
- Yes, using another's work product is plagiarism — correct
- No, provided the analyst redraws the chartWhy not: Redrawing changes the rendering and not whose analysis is being presented as the member's own.
Standard I(C) treats using another's work product as one's own as plagiarism. It is the competitor's analysis and presentation that is borrowed, whatever the underlying data.
The hardest tier
A member's marketing material is accurate in every statement but omits that the quoted track record was achieved at a previous firm with a different team. Is this a misrepresentation?
- No, since every statement made is trueWhy not: Sentence-by-sentence accuracy is not the test. Selective truth is a recognised way of misleading.
- No, provided the omission is corrected on requestWhy not: Correcting it for whoever thinks to ask leaves everyone who does not with the false impression.
- Yes, the omission leaves a false impression — correct
Standard I(C) is assessed by the impression the material creates. A document in which every sentence is true can still leave a reasonable reader materially misled, and an omission is one way to do it.
In the app: 9 practice questions on this outcome, a narrated walkthrough with diagrams, spaced review that brings it back before you forget it.
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