David's Investment Ethics Dilemma

Hard Professional Standards Application Responsibilities To Clients

David is a senior investment analyst at Greenleaf Capital, a firm that specializes in asset management for high-net-worth individuals. Recently, he was presented with a lucrative opportunity to invest a portion of the firm's client assets in a private equity fund managed by a family friend. David is concerned about the potential for a conflict of interest but is eager to take advantage of this investment, as it promises significant returns. He contemplates whether he should proceed with the investment without fully disclosing this relationship to his clients.

According to the CFA Institute's Code of Ethics and Standards of Professional Conduct, which option best describes David's ethical responsibilities in relation to his clients?

David should disclose the relationship to his clients and seek their consent before proceeding with the investment.

David can proceed with the investment as long as he believes it is in the best interest of the clients, without disclosing the relationship.

David must ignore his personal relationships and only recommend investments that are publicly available to ensure transparency.

Hint

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% Correct49%