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. Under the Uniform Securities Act, client information may not be disclosed to a third ...

    The correct answer is c. No authorization is needed from the client’s wife since it is a joint account. Also none is needed ...
  2. Is a private company required to disclose financial information to the public?

    Understand whether a private company is required to disclose financial information to the public. Learn what is required ...
  3. What are the disclosure requirements for a private placement?

    Learn about the SEC rules for disclosure requirements in private placement offerings, and understand what type of information ...
  4. Does a company logo change require a material disclosable event?

    A company logo change usually constitutes a material disclosable event. Securities law requires that companies disclose all ...
  5. Your firm is a registered investment advisor that specializes in investment management ...

    The correct answer is b: As a professional, you must be able to recognize when clients make requests for services that are ...
RELATED TERMS
  1. Confidentiality Agreement

    A legal agreement between two or more parties that is used to ...
  2. Non-Disclosure Agreement - NDA

    A legal contract between two or more parties that signifies a ...
  3. Disclosable Event

    A corporate event that is disclosed to shareholders. Securites ...
  4. Disclosure

    The act of releasing all relevant information pertaining to a ...
  5. Material Insider Information

    Material information, about certain aspects of a company, that ...
  6. Regulation Fair Disclosure - Reg FD

    A rule passed by the Securities and Exchange Commission in an ...
Trading Center