
Answer-first summary for fast verification
Answer: Yes, by calling his long-term client
## Explanation Mack's actions violated the Standard relating to loyalty by calling his long-term client before leaving Firm 1. **Analysis of Each Action:** **1. Calling long-term client before leaving Firm 1 (Violation):** - While employed by Firm 1, Mack owes loyalty to his current employer - Soliciting business for a competing firm while still employed constitutes a breach of loyalty - Even without a noncompete agreement, employees must not take actions that harm their current employer's interests while still employed **2. Soliciting former clients after joining Firm 2 (Not a violation):** - After leaving employment, professionals are generally permitted to solicit former clients - Since Mack does not have a noncompete agreement, he can contact former clients - Using social media to find and contact former clients is acceptable as long as he uses publicly available information (from memory in this case) **Key Principles:** - The duty of loyalty requires employees to act in the best interests of their employer while employed - Pre-departure solicitation of clients for a new employer violates this duty - Post-departure solicitation is generally permitted unless restricted by specific agreements Therefore, only the pre-departure solicitation violates the Standard of loyalty.
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Jerry Mack, CFA, an investment advisor, leaves his employer (Firm 1) to start at a competing firm (Firm 2). Mack does not have a noncompete agreement with Firm 1. Before leaving Firm 1, he calls his long-term client to describe Firm 2's product offerings so he can help the client reach his financial goals. After joining Firm 2, he opens a new social media account. From memory, he finds all his former clients on the social media platform and solicits business from them.
Did Mack's actions violate the Standard relating to loyalty?
A
No
B
Yes, by calling his long-term client
C
Yes, by soliciting business from former clients using the new social media account
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