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So much for the ethics test?

Traders in Morgan Stanley probe boasted about being CFA Charterholders

If you're a CFA Charterholder, does that automatically make you more ethical than the rest? In theory, yes. The famously difficult CFA exams include entire sections on ethics which theoretically make people who pass them better behaved than people who don't. Moreover, people who've passed all three exams (and are CFA Charterholders) are required to annually attest their adhesion to a CFA code of conduct guaranteeing that they'll act with integrity and won't be involved in - among other things - any 'misrepresentations' relating to investment analysis. 

At this stage, it's not entirely what went on at Morgan Stanley and the bank isn't commenting, but Bloomberg suggested yesterday that some kind of misrepresentation seems to have taken place, with traders in New York and London suspected of mismarking emerging market currency books to conceal losses of between $100m and $140m.

The probe may yet come to nothing and the traders may be found innocent of any wrongdoing. In London, however, Bloomberg says two traders are being investigated - Scott Eisner, an associate in FX volatility trading, and Rodrigo Jolig, an MD in FX options trading. Eisner is no longer listed on Morgan Stanley's internal directory and Jolig is out of the office. 

Both Eisner and Jolig are CFA Charterholders. And both make a big deal of this fact on LinkedIn - displaying their credentials alongside their names. Jolig has been a Charterholder since 2006 according to the CFA Members directory, and should be steeped in CFA ethics lore after 13 years in the fold. 

Morgan Stanley is conducting an internal investigation and the two men may yet be exonerated. As we noted earlier, however, the misconduct of which they stand accused is old-fashioned mis-marking of currency options and the sort of thing CFA Charterholders should surely know to steer clear of. 

If Eisner and Jolig are found to have been involved in the affair, the implication will be that CFA Charterholders aren't so shiny after all. And that it takes more than correctly answering exam questions to ensure good conduct. 

Photo by salih ferhat on Unsplash

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AUTHORSarah Butcher Global Editor
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  • SA
    SALIL OLTIKAR
    1 December 2019

    Ethics and designation are different things. Ethics isn't something that can be taught or learned. It is dependant on your internal moral compass.
    However CFA is a tough exam and it at least guarantees a more thorough understanding of the investment world than non CFA charter holders that too only at the entry level.
    Once you start working it's your application that counts

  • Lu
    Luke
    1 December 2019

    If it's proved they committed unethical behaviour they will be stripped of their charter and won't be CFA charterholders anymore. That's the implications of breaking the CFA code of ethics and how the CFA designation ensures ethical standards.

  • UA
    UA114782
    30 November 2019

    Sara sounds a bit salty about the CFA- did you have some problems clearing L2 ? Lol

  • Ro
    RoyBoy
    30 November 2019

    The reason this is newsworthy is because it's rare, if true. None of the 2008-09 bad actors were CFA charterholders.

  • Ju
    Julian Heron
    29 November 2019

    It's hardly boasting CFA to have the designation after your name... Maybe the writer is bitter? The headline is more fake news... Like others have said, if they acted badly, the should face the consequences including a referral to CFAi

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