Ethics question

Swamy joined Dillon Associates, an investment advisory firm. Swammy plans to continue serving on the board of directors of Landmark, a private company owned by her brother-in-law for which she receives 2,000 $ annually. Swammy also serves as an unpaid advisor to the local symphony on investing their large endowment and receives 4 season tickets to the symphony performances. According to Standard IV Duties to Employers, which of the following is most likely required of Swammy? Swammy must: A) deliver a copy of the Code of Standards to her employer if Dillon does not have a copy B) secure written permission from her employer before performing services for the symphony C) inform her supervisor at Dillon in writing that she has to comply with the Code D) disclose to her employer any additional compensation she receives from Landmark Enterprises and secure written permission to serve on the board

i’ll skip it since i’ve seen this and know the answer, but this is a book 6 question that pissed me off.

Am I allowed to weigh in if I already got tripped up by this question?

i know the answer too …

wow, this is confusing. More than one answer looks right.

Glad to hear that I had valid reason to scream and swear when I got the answer…


yeah, ethics on that book 6 exam was horsesh*t.

i know the answer too … I have seen this before on the forum itself.

I’m gonna go with B. A doesn’t seem to apply - it doesn’t even specify that Swamy is a CFA member. C doesn’t seem to apply for the same reason, plus I don’t remember reading about this anywhere. D doesn’t seem to apply because Swamy is not in competition with her employer by serving on the board. She can be a babysitter too, and I don’t think she needs permission - it’s only if she is in competition with her employer. So that leaves B - and she is receiving compensation, etc etc… How off am I?

sorry for the duplicate, I thought it would be a good example

SPOILER: I AM GOING TO GIVE THE ANSWER AS MANY HAVE ALREADY SEEN THE QUESTION Your answer: D was incorrect. The correct answer was B) According to Standard IV Duties to Employers, Swamy must secure written permission before undertaking the investment advisory work for the symphony because this work competes with her employer and could create a conflict of interest, as she is receiving compensation in the form of season tickets. Her service on her brother-in-law’s board may be subject to employer rules about outside employment but is not covered by the Standard since there is no likely competition or potential conflict with her employer. The question says “most likely,” so it is important to focus on the key difference between the two outside activities. Both are compensated; the fact that one is cash and the other tickets is irrelevant. The key difference is that for the symphony, Swamy is acting as an investment advisor for a large endowment, which clearly competes with her employer’s business. The actions in answers A and C are not required by the Standard. (Study Session 1, LOS 2.a)

is this not from book 6? i swear i saw it on the test.