Disclosure of Conflicts in Private Equity Investments

Very Hard Cfa Institute Code And Standards Responsibilities - Reference To Cfa

As a CFA charterholder, you are presented with an investment opportunity involving a private equity firm that is known to engage in aggressive tactics with its portfolio companies. You have a significant investment in this firm, which influences your professional responsibilities. Recently, you learned that the firm has been facing regulatory scrutiny, and some insiders suspect potential misconduct.

According to the CFA Institute's Code of Ethics and Standards of Professional Conduct, what is your primary responsibility in this scenario?

You should prioritize your investment returns and remain silent about the firm's practices.

You must disclose the potential conflicts of interest and the regulatory scrutiny to your clients.

You can make decisions based on your knowledge of the firm without consideration for the ethical implications.

Hint

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