Ethics Client Confidentiality

CFA Level II
#1

If the applicable law mandates that you maintain client confidentiality. But you come across illegal behavior on that client. What is the recommended course of action?

Text gives conflicting answers, in standard III (E) it says you must not disclose client information since law doesn’t allow you, however my personal Ethical guidance would suggest otherwise as it concerns illegal behavior. If one is subjecting himself to the higher ethical standard, which is higher than the applicable law, how could it be wrong?

Help?

#2

Follow the applicable laws. If they say you must disclose then you disclose. If no regulatory or legal reason, keep confidentiality.

#3

Remember stricter law. Standard required you to disassociate from the activity. And report it if required by stricter law.

#4

Good point. Didn’t look for a solution from that angle.