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CFA Level I · CFA Level I Exam · Guidance for Standard IV: Duties to Employers

Tomas Reyes, a portfolio manager at Kestrel Advisers, plans to resign in two months and start a competing firm. During his notice period, he most likely violates Standard IV(A) if he:

Reyes most likely violates Standard IV(A) by copying the firm's client list to solicit clients for his new firm. This uses confidential employer information and harms the employer, whereas planning on his own time with his own skills, or communicating with approval, does not breach the duty of loyalty.

  1. Atells clients about his departure after his employer has been informed and has approved the communication.
  2. Buses his own general knowledge and skills to prepare a business plan at home on his own time.
  3. Ccopies the firm's client list and contact details to his personal device to use in soliciting clients for his new firm.Correct

Explanation

Standard IV(A) requires acting for the employer's benefit and not divulging confidential information or otherwise causing it harm. Taking the client list for use in soliciting clients is misuse of employer property and information that harms the firm. Preparing plans on his own time without using employer resources, and informing clients with employer approval, are not violations.

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