Question #21
Reading: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV
PDF File: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV.pdf
Page: 9
Status: Incorrect
Correct Answer: A
Your Answer: A
Question
Fernando Abrea, CFA was an analyst for Pacific Investments. In October he left Pacific and joined Global Securities as manager of a local office. Abrea's change of employment came about in the following manner: In April, Abrea contacted Global about a possible position he saw advertised in a financial publication and had exploratory meetings with Global. In July, Abrea submitted a strategic plan to Global and signed an agreement to join Global. He then contracted for office space on behalf of Global. On October 15, Abrea's resignation from Pacific became effective. He did not take any client lists from Pacific. On October 16, Abrea mailed a letter that explained his new undertaking with Global to prospective clients, including his former clients at Pacific. With respect to Standard IV(
Answer Choices:
A. violated the Standard by contacting his former clients at Pacific
B. did not violate the Standard
C. violated the Standard by contracting for office space on behalf of Global
Explanation
According to Standard IV(A) Loyalty, preparations to leave employment are not prohibited.
Even though Abrea engaged in significant preparatory activities prior to beginning his new
venture, none of these actions suggest Abrea did not continue to act in Pacific's interests
while he was employed by Pacific. Abrea may contact his former clients on behalf of Global
after his employment by Pacific has officially ended, as long as he did not misappropriate
their contact information from Pacific.
(Module 42.7, LOS 42: IV(A))