Guys, this is my 1st posting in this forum. Hope you guys can help. It is regarding the Standard III (E) Preservation of Confidentiality on pg 67 in CFA1… “If applicable law requires disclosure of clients’ information on certain circumstances, member or candidate must comply with the law. Similarly, if applicable law requires member or candidate to maintain confidentiality, even if the information concerns illegal activities on the part of the clients, member or candidate should not disclose such information.” But according to Standard I (A) Knowledge of Law, member or candidate must follow the more strict laws if there is any conflicts between applicable law and CFA Code of Ethics & Standards of Professional Conducts. And here, the Code requires member to preserve client’s confidentiality unless under 3 circumstances (which includes illegal activities) Q: If let say now the information concerns illegal activities on the client part and applicable law requires members to preserve confidentiality. So shall member disclose that illegal information, to comply with the more strict law (under Standard I) or shall he preserve the confidentiality of the client’s information? Thanks in advance…
More strict law here is preseving the confidentiality, I believe. So, preservation holds.
Rule number 1: Never break the law!
willowlau Wrote: ------------------------------------------------------- > More strict law here is preseving the > confidentiality, I believe. So, preservation > holds. I think my confusion here is that which is the more strict law/ rules? To preserve the confidentiality (as per the applicable law) or to disclose the illegal information (as per the Standard)…
The grey part here is how do you know the information is absolutely illegal. Any apparent evidence there to convict someone? I don’t think the Standard means to train us to be any kind of SEC police (well, not to be those who let Madoff escaped years ago). So, I would say the applicable law to preserve the confidentiality holds. Hope this would help.