Ethics Question

Malaysian law is very lax regarding outside consulting arrangements by investment professionals. It is common for analysts and portfolio managers to maintain ongoing consulting contracts with entities other than their primary employer. As a result of this, Montpier has begun financial service consultations for members of a local investment club. The club is in the process of developing an appropriate compensation package for her services, which to date have included financial planning activities and investment research. When Montpier established the relationship with the investment club she informed them that she had a full-time job at World Renowned Advisers, which offers similar services. After a year of consulting with the investment club, Malaysian law changed, requiring investment bankers, securities analysts, and portfolio managers to register with the Malaysian Securities Commission in order to engage in independent consulting practice. Since she is unaware of the change, Montpier does not file the proper registration forms and is later investigated, fined, and temporarily sanctioned by the Malaysian Securities Commission. Montpier is able to have the sanction, but not the fine, removed after appealing the Commission’s ruling. In providing financial planning and investment research services to the investment club, has Montpier violated any CFA Institute Standards of Professional Conduct? A. Yes. She has not received consent from her employer to all of the terms of the arrangement. B. Yes. She has not received verbal approval from her employer and written approval from her financial service client. C. No. She is performing consultations on her own time and has informed her financial service client of her firm and its services. D. No. She has not yet received any compensation for her consulting services and has informed her financial service client of her firm and its services.


Def A

A it up

Please be A.

A is correct. I was going to go with A but I remember something about not being a violation if you do something in your own time. So I picked C. So when is it a violation to do something in your own time and when is it NOT a violation because it feels like one question says its a violation and then another will say its not a violation.

There were so many violations in that beast it was anyone’s guess which direction they were gonna hit it from.

Yea, there were a lot of stuff that were questionable in there, i hate schweser ethics ques. So there isn’t any clear cut way of knowing when its a violation to do it in your own time or not?

It’s a violation because it directly competes with her employer.

I see Aimee, so if it had something to do that was not in the same line of profession that would compete with the employer, then it would be acceptable. Is that correct?

That’s my interpretation. If she’s taking potential business away from her employer, she needs permission.

k, I get it now. I hate ethics (espically schweser ethics). Thank you for helping me understand it :slight_smile: