Corrales manages a hedge fund that seeks out investment opportunities in developing markets. Using

assets of the fund’s investors, the fund hires local companies to serve as “sub-advisers” to explore and

obtain promising investment opportunities and navigate local laws and regulation. The sub-advisers

often have very limited experience as financial consultants or advisers but do have close relationships

and connections with local high-ranking government officials. The payments made by Corrales, through

the sub-advisers, often cover substantial “deal fees” and other expenses that facilitate governmental

support of each investment. Corrales does not require the local business partners to provide details of

their activities or what specific expenses are covered by the fees. Corrales reports these expenditures

to fund investors as operating expenses necessary to the success of the investment. Over several

years, the hedge fund is very successful producing an 18% annual rate of return for its investors. Did

Corrales actions violate the CFA Institute Code of Ethics and Standards of Professional Conduct?