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Up6
Joe Tichy, CFA, works with Oasis Investments as an investment advisor. Prior to joining Oasis, Joe worked with another investment management firm. Joe took no records from the previous firm and didn’t have a non-compete agreement with the previous firm. Joe remembers some of the clients of his previous firm and contacts them after he joins Oasis as he feels that some of them might follow him to the new firm. Which of the following statements relating to violation of CFA Institute Standards of Professional Conduct is most likely true?
- Joe does not violate any of the CFA Institute Standards of Professional
Conduct. - Joe violates the CFA Institute Standards of Professional Conduct, as he
must seek permission from his previous employer before contacting clients
of that firm. - Joe should not contact clients of his previous firm as it is against the
interest of his previous employer. As a charter holder, Joe is supposed to
be loyal to his previous firm even after discontinuing employment.
- Joe does not violate any of the CFA Institute Standards of Professional
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Up5
Woo! I got it right.
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Up4
I agree – no violation there for me. He didn’t actually take any records with him (that belong to the firm) and he has no non-compete so nothing wrong there. As long as he contacted the clients using information from “public sources” – then that is ok.
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Up4
Correct Answer: A
Standard IV (A), Loyalty, requires acting in employer’s best interest until resignation is effective. Soliciting employer’s clients prior to leaving constitutes violation of standard IV (A). However, once an employee has left a firm, simple knowledge of names of the firm’s clients and contacting them for soliciting business is not a violation of the standard, unless there is a non-compete agreement in place.
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Up2
Thoughts? I think so far he hasn’t violated anything, but it’s a bit gray for me…
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