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Answer: No, as her teaching activity does not conflict with her role at SFM, and her preparations for a competing business do not breach her duty of loyalty.
According to **Standard IV(A) - Loyalty**, members and candidates must abstain from independent competitive activities that conflict with their employer's interests. Jacobs' teaching assignment does not conflict with her role at SFM. Additionally, **Standard IV(B) - Additional Compensation Arrangements** requires written consent for benefits that might create a conflict of interest, but her teaching activity does not compete with SFM. Regarding her preparations for a competing business, departing employees are generally free to make such arrangements as long as they do not breach their duty of loyalty, which is not evident here. Therefore, Jacobs has not violated the Standards.
Author: LeetQuiz Editorial Team
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Melinda Jacobs, CFA, a portfolio manager at SFM Asset Managers (SFM), teaches an investment course at a business school on weekends for a fee. She is planning to leave SFM and has begun developing marketing materials for a new business that will compete with SFM. Has Jacobs most likely violated the CFA Institute Standards of Professional Conduct?
A
No, as her teaching activity does not conflict with her role at SFM, and her preparations for a competing business do not breach her duty of loyalty.
B
Yes, by accepting a fee from the business school, which could create a conflict of interest.
C
Yes, by developing marketing materials for her new business that will compete with SFM, breaching her duty of loyalty.
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