Buta Singh, CFA, has a large extended family and manages the portfolios of sever

Question

Buta Singh, CFA, has a large extended family and manages the portfolios of
several family members. Singh does not charge the family members a
management fee, but receives a small percentage of each portfolio’s profits.
Singh accepts a position as portfolio manager for Bhotmange Investments to
manage high net worth accounts. Because the family portfolios are not customary
or normal client relationships, Singh does not inform his new employer of his side
activity. Singh is least likely to have violated which CFA Institute Standard of
Professional Conduct?

A. Loyalty.
B. Preservation of Confidentiality.
C. Additional Compensation Agreements.

Explanation / Answer

B is right

There is no evidence Singh violated Standard III (E) – Preservation of

Confidentiality. Members who plan to engage in independent practice for

compensation should not render services until receiving written consent from their

employer. To do so without prior consent from the employer violates Standard

IV(A) – Loyalty and Standard IV (B) – Additional Compensation Agreements

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