A-la-THE FIRM (With Tom Cruise…for those who haven’t seen it): Nick O’Donnell, CFA, unsuspectingly joins the research team at Wickett & Co., an investment banking firm controlled by organized crime. None of the managers at Wickett are CFA Institute members. Because of his tenuous situation at Wickett, O’Donnell begins making preparations for independent practice. He knows he will be terminated if he informs management at Wickett that he is preparing to leave. Consequently, he determines that “if he can just hang on for one year, he will likely have a client base sufficient for him to strike out on his own.” This action is: A) a violation of his duty to disclose conflicts to his employer. B) a violation of his fiduciary duties. C) not a violation of his duty to employer. D) not in violation of the Code and Standards as the employer’s violations of the law absolve him from his ordinary duties to this employer under the Code and Standards Your answer: B was incorrect. The correct answer was C) not a violation of his duty to employer. O’Donnell is required to obtain consent from his employer if he is attempting to practice in competition with his employer. Merely undertaking preparations to leave, which do not violate a duty, is not a violation of the Code and Standards. Ok. Agree with it I guess. But what if he was already in the middle of his plans to move out? Will that be B or D?
D is never an option I think… whether or not his employer is covered by the Code, HE (Nick) IS…so he has to abide…
I love it how he’s employed by a firm that works for ORGANIZED CRIME. And where here trying to see if he broke his fiduciary duties to the clients based on CFAI standards. Oy vey.