Independent Practice or Additional compensation ?

That is the question … Marc Feldman, CFA, is manager of corporate investor relations for a high-tech startup,, in Boise, Idaho. Feldman is well-known in the high tech community in Boise, and has asked if he will help them organize their investor relations function on a consulting basis. They offer him an all-expenses-paid two-week holiday for two on Australia’s Gold Coast in payment. Regarding this offer as a CFA Institute member Feldman is: A) allowed to accept the offer only with written approval from zippy and from Dragon. B) allowed to accept the offer only with written approval from zippy. C) not allowed to accept such an offer since it effectively places him in competition with his employer. D) not allowed to accept such an offer since the compensation is non-cash and, therefore, is hard to quantify for the purpose of adhering to the Code and Standards.

My presumtive answer is A.



B. Dragon is giving him the offer so what is the need for approval there?

MO ?


CFAAtlanta, The reason for receiving ‘all parties’ consent is to allow those involved to determine independence and objectivity. managers need to be aware of other time constraints and loyalties to his current manager. The only angle here I see as a grey area is the issue of ‘corporate relations’ and how much objectivity is needed in relation to this job function. Although I could be wrong.


Mo you gonna give an answer or are you gonna let us all sit here like we are on the Level I forum? Come on man, You’re better than this.

Standard IV(B) Covered persons must not accept any form of inducement or recompense - the Standard mentions “gifts, benefits, compensation, or consideration” - that competes with their employer’s interest or that might reasonably be expected to produce conflict between their own and their employer’s interest, unless they obtain written consent from all parties involved. For example, employees must not accept a consulting assignment, an appt to a board of directors, … p148-149 of V1, CFAI Readings

better be “A” !!! where is MO ?

I’d go with A. If someone came to me and made me this offer, what will I Do? I will have them sign it off in a contract and will also have my employer approve it. The only trouble here is that I work for my employer and they should get a piece of my earnings. In this case they get nothing.

B. - don’t think Dragon needs to approve. What are the choices does Dragon have? Approve or ???

Mr.Good.Guy Wrote: ------------------------------------------------------- > Mo you gonna give an answer or are you gonna let > us all sit here like we are on the Level I forum? > Come on man, You’re better than this. Sorry MGG I had to take my son to soccer practice … .The answer according to Sch. is A I picked B since Dragon is not a client of Zippy and I figured this woud be independent practice. Turns out I was wrong.

Yes, the answer is A. You need written approval from your company (zippo) AND the outside company (Dragon). Why Dragon? They need to affirm in writing that they are aware about your other job and that you have obligations to that other company. This makes sure that all parties are aware of potential conflicts of interest and there is basically disclosure about all relationships in the job-love-triangle.

bchadwick - that makes sense now.

Hold on! how do you know that Dragon hired him independently? I thought thats what this guy did for a living for his employer. how is this testing anything? we all know the stuff but the wording is so ambigous.

Well, being an investor relations representative means that you represent your company (zippy, here) to analysts and potential investors. Helping to organize an investor relations conference means that you’re mostly an event planner, even if your guests are likely to be peers in your industry. There doesn’t seem to be a huge conflict of interest, other than how to budget your time fairly between responsibilities.

Also, while the Handbook doesn’t make it clear that you need ALL parties involved to content, the Ethis in Practice CFAI reading DOES make this clear…