Ethical Disclosure in Investment Advisory

As an investment advisor, you have recently received a request from a prospective client to provide an investment strategy that includes investing in a private fund. You are aware that the fund has legal issues involving previous disclosures of conflicts of interest. While discussing this with your colleagues, you find that some believe it could be beneficial to keep these issues undisclosed to the client to secure the business.

According to the CFA Institute’s Code of Ethics and Standards of Professional Conduct, particularly pertaining to professionalism and legal knowledge, which of the following approaches is the most ethical and compliant with the Standards?