Disclosure of Conflict of Interest

Hard Cfa Institute Code And Standards Conflicts - Disclosure

As an investment advisor, you have been managing a portfolio for a high-net-worth individual for several years. During a recent review, you discover that a family member of yours, who is also an employee at a publicly traded company, has significant holdings in the company. This family member has provided you with non-public information that could significantly affect the stock's performance. You are faced with a dilemma: whether to act upon this information when advising your client or to disclose the conflict of interest that arises from your relationship with the family member.

According to the CFA Institute Code of Ethics and Standards of Professional Conduct, which of the following actions should you take to remain compliant with ethical guidelines?

Maintain confidentiality and use the non-public information to assist your client.

Disclose the conflict to your client and refrain from acting on the non-public information.

Notify your family member to disclose the information to the public before advising your client.

Hint

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% Correct94%