14. An example of professional misconduct would be the act applying your engineering seal to engineering plans that you have prepared but are not yet complete. 8) applying your engineering seal to an engineering drawing that was prepared under your direct and careful supervision. 0 ©) applying your engineering seal 10 an engineering drawing that you did not prepare but that you have thoroughly reviewed. a) @)and &). 2) (and. 15. Engineers who set up their own companies and go into private practice: @) Gually have a wide range of responsibilities. SS) ssusually expeience fever heal ents ant teinans tsi these experienced by other engincers in industry. ©) -Hlo not require an engineering license to practice engineering. 4) wallof the above. ©) none of the above. Scenario for Questions 16-20: Read the following newspaper article entitled “Dealers must disclose bad brokers”. Then, answer the five questions that follow, based on the information in the article. Dealers must disclose bad brokers: Precedent-setting court decision will force brokerages 0 inform clients of misconduct By Derek DeCloet, National Fost, March 13, Sg» Brokerage firrss have a "duty to inform” clients when their investment advisor has been disciplined for misconduct, an Ontario judge hes ruled in a decision that is causing regulatory headaches for Ray Street, texte Doral Gordon of Ontario Seperin Coun. fond tatoo brokerage ~Midond ala Copii Ia and Loge Securities na ~ were eglgen becuse thy flea Wan Barto ene wont he GhecterédRitary of er franeral ebice whe Se Se a mt i sa be Tol sdk Eionge The ruling means brokeroge firms may be forced to tel elents any time their stoctbroker lands into lego ‘rouble for bad investment advice, particularly ihe has Been reprimanded or fired for his actions. “tsa precedentsemting case,” said Rober Brush a securities litigator with Groia and Co. a Toronto law Sem. "The invesior now can moke a decision, fnct with full knowledge, beter knowledge” obout who he is dealing with, ‘But brokeroge firms are facing a potential nightmare in complying with the new law.One interpresation is that Justice Gordon's ruling will require a firm to tel all of @ broker's customers about regulatory problems ~ even those clieats wha have net been affected by them. For example, if an ‘advisor with 300 clients was found to have done unouthorized trades in one account, the firm would hove to tell the other 299 clients about his actions. “Wis just not feasible,” said one loweyer for a major Bay Stret brokerage house, who spoke on condition of enonyrity. “hs the kind of decision thet just enroges The case involved Gale and Robert Blackburn, a couple from Waterloo, Ont, who lost $190,000 in their ) investment account over three years in mid-1990s. . Their broker, George Georgiou, wos 0 star broker ot Midlond Welwyn (later acquired by Merrill Lynch Conada Inc) in the late 1980s and early 1990s. But he was also an aggressive broker, and was fired in Movember 1993 efier the firm received several compleins from clienis alleging he made trades without ‘their authorization, ‘About the tine ofthe fring. the stock exchange lounched on investigation into his conduct. But just days ofter ie was sacked by Midlane, Mr. Georgiou was offered a job by Levessue Securities In, (nom part ef National Bonk Financial Inc), ond he pervaded the Backus to bring thir many to it new frm, \ Neither Midland nor Levesque told the couple about he broler’s problems, bu they should have, Justice Gordon said. "Midland knew George Georious's conduct was improper, contrary to thé regulations and had, in all probabil. caused losses to other cliens.” the judge wrote in his 71-poge decision. "K was foreseeable, therefore, thet further losses would likely result from to clients who continued to do business with George Georgiou" He edded: "Firms de have a duty to inform their clients, ehhigher duty .. becouse the firms have greater knowledge” about an individual's record. “This is porticularly the case here when Midland and Levesque both knew... but chose not to wern their clients.” Mr. Georgiou was fired by Levesque in Jersary 1995. Under carrenvintusery precice, investors wsually ind out about o broker's regulatory trouble only ift results in diseiplinery ection from the Investment Dealers Association of Conada. But in some cases, brokers are cerminoied for misconduct that never results in @ pencity from the IDA. Graeme Harris, a spokesman for RBC Dominion Securities, the country's largest brokerage, soid his firm was sill reviewing the decision before deciding whether to change its procedures. One potential problem is thot illing curtomers why an employee was let go could violate that person's privacy, he said Kelly Hechler, a spokeswoman for TD Weternouse Caneda Inc.. said her firm was still reviewing the decition The judge ordered the brokerage firms and Mr. Georgiou to pay the couple $142,500, plus interest deting back seven years.16. Why are brokerage firms concemed with the judge’s decision? a) Itmay force them to notify all clients of any investment dealer who has been disciplined for misconduct. ¥ 4) -Iumay be extremely expensive and time-consuming for them, if they are forced to notify all clients of any investment dealer who has been disciplined for misconduct. “ c) It may violate the confidentiality rights of the invesument dealer found . guilty of misconduct. D @aiQ .e) All of the above. 17. The fact that the brokerage Midland Walwyn received several complaints about one of their investment advisors: a) should have caused the brokerage to firc the investment advisor. * x >) should have caused the brokerage to investigate the investment advisor’s activities : isan issue for which the brokerage is responsible.“ ; - () and (c). ° ©) all of the above. 18. If the case described in the article was altered so that it described an engineer Gather than an investment advisor) working at an engineering company (rather than 2 brokerage), would it be acceptable for the engineer to carry out engineering tasks without a client's authorization? a) Yes, ifit could result i “profits for the client.” UB) Yes, ifn unusual emergency situation arose requiring immediate action and did not permit time to contact the client. ©) No, because engineers know more than their clients about engineering. 4) Allof the above. e) None of the above. 19. The judge wrote in his decision regarding the investment advisor's miscondvet, “Firms have a duty to inform their clients ...” Which requirement of the Code of Ethics for engineers in Ontario does this statement parallel? Engineers must treat their duty to the welfare of the public as of paramount importance. “ 5) Engineers should only practice in engineering fields in which they are competent, * d — Allofthe above. ©) None of the above. 3 Engineers have a duty toward their employers,terpretation of the judge’s ruling may be thal a brokerage is required to tell all of an investment advisor’s clients, regardless of the number, about the misconduct of that investment advisor. This interpretation: 2) should always be enforced, regardless of the circumstances. b) ~ should never be enforced, because it violates the confidentiality rights of the investment advisor. /, as should be enforced if the circumstances of the situation ere determined by the proper authorities to warrant such an action. 7 4) would not be in the public interest. €) None of the above. Scenario for Questions 21-25: Read the following fictional case study (adapted from “Online Ethies Center for Engineering Ethics”) and answer the questions based on the information in the scenario. “Jay's boss is on acknowledged expert inthe field of catalysis, Jays the engineer leader of a group that has been charged with developing a new catalyst system, ond the search has narrowed to two possibilities, Catalyst ‘A’ ond Catalyst ‘B The boss is certain thatthe best choice is 'A”, bu he directs thot tests be run on both, just for the record.’ (Owing to inexperienced help, the tess take Langer thon expected and the results shaw that ‘Bis the preferred moterial. The engineers question the validity ofthe tests, but because ofthe project's imetable, there fs no time 10 repeat the series. The bess, therefore, directs Jay to work the math backwards end come up with phomy dota to subsianuiare the choice of Catalyst ‘A: a chotce that all ofthe engineers in the group, including Jay, ogree with The report to the client is due in two days” 21, What should Jay do? a), Write the report as told by his boss. Airy to do more research on catalyst ‘B". WS G) Write the report stating that “B’ is a better catalyst. Inform Ministry of Labour. < 22. Making the numbers “look good” and Ieaving out the data abou contravention with the PEO Code of Ethics paragraph: 710) @ ¥, Oe m1) iy / °) 776) ds) 775) ©) none of the above. ere in23. If Jay had refused to write the report, how could he have justified this refusal since all of the others on the team felt that the test data was invalid and there was not time to duplicate the test? (a) Explain why he thinks the test must be duplicated. “ B) Call in sick. ¢} Ask somebody else to write the report. “AJ Goto the upper management and explain the situation. / 24. How would the ethical dilemma change if Jay’s team results have shown that the catalyst "A’ would endanger the public's safety? @) The report must be written to show that catalyst 'B'is the choice. .d)_Jay must refuse to write the report. Jay must write that catalyst 'A' endanger public safety. 4) None of the above. \ 25. If Jay's boss is not an engineer, which of the following shoulday do? a) __ Inform the management that the boss is wrong and “A” is not the choice catalyst b) Write the report indicating thet the boss is wrong in selecting catalyst ‘A’. ©) Refuse to waite the sepor. d) Write the report indicating thet catalyst ‘B” is « better choice than ‘A’. £2) Try to explain to his boss why more tests are necessary 26. Asset of moral principles or values that governs the conduct of an individual or a group is called: a) Relativism b) Legalities Ethics Morality ~ 27. You are working for a large company that is putting a lot of resources into trying to find a better fuel cell. You found out that one of your colleagues is leaking, research information to your company's competitors. Which of the following should you do? 2), Take no action. ay, Report your colleague. 7 ©) Think: ‘Good, the fuel cell will be more widely and cheaply available if it's made by more than one company's" ® Try to raise the issue with your colleague and take it from there.