David's Conflict of Interest Dilemma

Very Hard Professional Standards Application Conflicts Of Interest

David is a senior financial analyst at a reputable investment firm that specializes in large-cap equity investments. Recently, he was approached by a well-known hedge fund to offer his insights on their investment criteria while simultaneously being offered a small consulting role with them for extra compensation. The hedge fund is known for its aggressive trading strategies, which could conflict with David's current responsibilities to his clients at the investment firm.

As David contemplates this opportunity, he reflects on his obligations to his current employer and clients, particularly concerning potential conflicts of interest. David must balance his desire for additional income and the necessity to adhere to professional standards that promote ethical conduct. Under the CFA Institute's Code of Ethics and Standards of Professional Conduct, how should David proceed?

Accept the hedge fund's consulting role after informing his employer, ensuring his client obligations are not compromised.

Decline the consulting role, as it poses an inherent conflict between his duties to his clients and his personal gain.

Accept the consulting role without informing his employer, as the role will not directly impact his analyst work.

Hint

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