Ethics - Diligence and reasonable basis

CFA Level II Ethics
#1

Example 2 (sufficient scenario testing)

In this case, Babu dhaliwal deliberately presses his client to project maximum production numbers and then used it as a base case scenario.

Why would this fall under Diligence and reasonable basis and not Misrepresentation??

#2

reasonable basis to project maximum numbers? and then use as base case?

#3

Yes. Refer to the mentioned example. Id be more than happy to discover I read it wrong.