Question #12
Reading: Reading 42.3 Standards of Professional Conduct Guidance for Standards III
PDF File: Reading 42.3 Standards of Professional Conduct Guidance for Standards III.pdf
Page: 5
Status: Correct
Correct Answer: A
Question
Calvin Doggett, CFA, has been contacted by the CFA Institute Professional Conduct Program (PCP) regarding allegations that he has taken investment actions that were unsuitable for his clients. Doggett is questioned by PCP concerning the identity of his clients he considered suitable for investing in a very risky start-up company that eventually went bankrupt. Doggett will:
Answer Choices:
A. not violate the Code and Standards only if he reveals the financial condition and investment objectives of his clients on an anonymous basis and does not reveal the names of his clients to PCP
B. violate the Code and Standards by fully cooperating with a PCP investigation if it means revealing confidential information
C. not violate the Code and Standards by revealing the names, financial condition and investment objectives of his clients to PCP
Explanation
Standard III(E) requires members to preserve client confidentiality. An exception to this
standard is a PCP investigation. Because PCP will also keep the clients' information
confidential, members are expected to fully cooperate with PCP investigations.
(Module 42.6, LOS 42: III(E))