Conflict of Interest: Disclosing Familial Relationships

Hard Professional Standards Application Conflicts Of Interest

Jessica is a CFA charterholder and works as an investment analyst at a large financial services firm. Recently, she discovered that a new client, Tech Innovators Inc., which she is responsible for analyzing, has hired her brother as a senior project manager. Jessica knows this information but has not disclosed it to her firm. Furthermore, she has been attending meetings where her analysis on Tech Innovators is discussed and assessed. Jessica is concerned about the potential perception of bias in her analysis.

In this scenario, which action should Jessica take to adhere to the CFA Institute’s Code of Ethics and Standards of Professional Conduct regarding conflicts of interest?

Jessica should disclose her brother's employment at Tech Innovators to her supervisor and recuse herself from any analysis related to the company.

Jessica can continue analyzing Tech Innovators without disclosing her brother’s relationship, as long as her analysis is based on objective data.

Jessica should inform her brother about the conflict and ask him to resign from his position to eliminate any appearances of impropriety.

Hint

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