Question #49
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: 20
Status: Correct
Correct Answer: A
Question
While servicing his clients' accounts, an analyst who is a CFA charterholder, determines that one client is probably involved in illegal activities. According to Standard III(E), Preservation of Confidentiality, the analyst may NOT do which of the following?
Answer Choices:
A. Contact the appropriate governmental authorities about the determination
B. Contact CFA Institute about the determination
C. There are no exceptions in this list
Explanation
Standard III(E) allows an analyst to reveal information about a client to CFA Institute since
CFA Institute will keep the information confidential. If the analyst is reasonably certain a
law has been violated, an analyst may have an obligation to report the activities to the
appropriate authorities. Therefore, neither of the listed actions are exceptions from the
analyst's options.
(Module 42.6, LOS 42: III(E))