Answer-first summary for fast verification
Answer: Yes, it violates Standard VI(C) due to the undisclosed referral arrangement.
**Explanation:** Kawasaki's informal referral arrangement with other professionals, even without cash payments, constitutes a quid pro quo arrangement under Standard VI(C) – Referral Fees. This Standard requires disclosure of any compensation, consideration, or benefit received from or given to others for the recommendation of products or services. Since Kawasaki did not disclose this arrangement to clients, it violates Standard VI(C). Option A is incorrect because the arrangement does violate the Standards. Option C is incorrect because the issue pertains to referral fees (Standard VI(C)), not general client communication principles.
Author: LeetQuiz Editorial Team
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Ken Kawasaki, CFA, shares a building with other investment management professionals and has an informal referral arrangement with them, without disclosing this to clients. Does this arrangement likely violate any CFA Institute Standards of Professional Conduct?
A
No, the arrangement does not violate any Standards.
B
Yes, it violates Standard VI(C) due to the undisclosed referral arrangement.
C
Yes, it violates Standards related to client communication.
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