Question #39
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: 16
Status: Incorrect
Correct Answer: A
Your Answer: A
Question
John Hill, CFA, has been working for Advisors, Inc., for eight years. Hill is about to start his own money management business and has given his two weeks' notice of his resignation from Advisors. A few days before his resignation takes effect, Rod Bright, a former client of Advisors, calls Hill at his home about his new firm. Bright says that he is very happy that Hill is leaving Advisors because now he and Hill can resume a professional relationship. Bright says that he would never become a client of Advisors again. Hill promises to call Bright back after he has left Advisors but takes no further action. Hill does not tell Advisors about the call. Hill has most likely:
Answer Choices:
A. violated the Standard concerning loyalty to employer
B. not violated the Standards
Explanation
Based on the information here, Hill has not violated the Standards. The phone call was not
with a current client of Advisors, and the individual made it clear that he would not
become a client of Advisors. Therefore, there was no breach of loyalty to Advisors by Hill
for not acting in his employer's interests, nor is there a conflict of interest.
(Module 42.7, LOS 42: IV(A))