Q:
A CFA Member or Candidate may be justified in disclosing confidential information received from a client, but not be in violation of Standard III-E, Preservation of Confidentiality. In making such a disclosure, all of the following situations would be justified except:
A) This information was only disclosed following written authorization by the client.
B) This information is being requested by prosecuting attorneys in a court case involving the client.
C) This information is outside the scope of the confidential relationship.
D) This information is being forwarded to a business associate seeking sales leads.
A:

The correct answer is: D)
While acknowledging the importance of preserving confidentiality (and sensitivity of financial information disclosed), the Standards of Practice Handbook discusses a number of exceptions to its rule - such as if the client authorizes a disclosure, or if such disclosure is legally required, or if the information is not material. On the other hand, Standard III-E is intended to prevent situations such as business associates sharing sales leads.


RELATED FAQS

  1. A person whose registration has been revoked by an Administrator due to a felony ...

    The correct answer is a. The Administrator may suspend, deny or revoke registration in any capacity if the person has such ...
  2. Which of the following, under the NASD Conduct Rules, would constitute a complaint ...

    The correct answer is b. The NASD defines a “complaint” as adverse communications that are in writing. Choices I and III ...
  3. An investor has bought 25 call options on oil. The exercise price of the call is ...

    The correct answer is: a) Rule for a long call position: If at expiry, the asset price settles below the expiry price, Do ...
  4. Under the Investment Company Act of 1940, which of the following is not a formal ...

    The correct answer is d. A mutual fund is technically registered under the ’40 Act as an open-end management investment company. ...
RELATED TERMS
  1. No results found.
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center