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CFA Level I · CFA Level I Exam · Code of Ethics and Standards of Professional Conduct

A candidate learns that a colleague at his firm is routinely violating a securities regulation that applies to the firm's activities. The candidate has not taken part in the violation. Under Standard I(A), the candidate's obligation is most likely to:

The candidate must dissociate from the violation. Standard I(A) requires members and candidates not to knowingly participate or assist in any violation and to dissociate from it, so merely staying uninvolved or continuing to support the colleague's work does not satisfy the standard.

  1. Adissociate from the violation, as he must not knowingly participate or assist in itCorrect
  2. Btake no action, because he has not participated in it
  3. Ccontinue working on the colleague's accounts, provided he does not share in any resulting profit

Explanation

Standard I(A) says members and candidates must not knowingly participate or assist in, and must dissociate from, any violation of laws, rules, or regulations. Passive non-participation is insufficient once he knows of the violation. Continuing to work on the accounts could amount to assisting.

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