Diane's Ethical Dilemma in Reporting Misconduct

Very Hard Professional Standards Application Responsibilities To Employers

Diane is a senior investment manager at Trustworthy Capital, a firm known for its rigorous compliance and ethical standards. Recently, she discovered that one of her colleagues has been misrepresenting the performance of their investment products to clients to secure new business. While Diane feels compelled to report this misconduct, she is also worried about the potential ramifications it could have on team morale and the company's reputation. As a CFA charterholder, she needs to navigate her responsibilities to the firm while maintaining professional integrity. According to CFA Institute's Code of Ethics and Standards of Professional Conduct, how should Diane approach this situation?

Diane should discuss her concerns with her supervisor first and seek guidance on how to handle the issue internally.

Diane should report the misconduct directly to regulatory authorities without discussing it with anyone at her firm.

Diane should gather more evidence of the misconduct before taking any action, even if it means delaying reporting.

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