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Ethics: duty to employer

Hi there

Help me understand this.

I came across this question.

William Conrad, CFA is due to leave his current employment as a stockbroker in order to set up his own business. Whenever he talks to clients he signs off by telling them that he will shortly be leaving the firm, and that he will be unable to talk about his new venture until after his resignation becomes effective. Has William violated the Code and Standards?

The answer is

No, as he has done nothing to induce the clients

My question is, by saying he can only talk about it after his resignation wont that already alert clients that he is starting his own firm?

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Marton wrote:

Hi there

Help me understand this.

I came across this question.

William Conrad, CFA is due to leave his current employment as a stockbroker in order to set up his own business. Whenever he talks to clients he signs off by telling them that he will shortly be leaving the firm, and that he will be unable to talk about his new venture until after his resignation becomes effective. Has William violated the Code and Standards?

The answer is

No, as he has done nothing to induce the clients

My question is, by saying he can only talk about it after his resignation wont that already alert clients that he is starting his own firm?

The first sentence is a red herring. What matters is what he actually tells his clients. Take away that first sentence and read the question again. For all his client know, his new venture could be inseminating cows. There’s nothing there to suggest he’s hanging his own shingle.

If you think it through what would be the alternative in this situation? Practically he would have to tell clients he is leaving but is avoiding a conflict. 

He would have violated the standards if he had tried to entice firm’s clients to join his new company. He is not doing that. He is stopping himself after telling them his plan of leaving the company. He has not given the name or any other information to them, so no violation of standard.