Practice question from CFA ethics vignette involving two plausible actions, where only one subtly violates the Standards.
Analyst James Parker is preparing to leave Titan Investment Group for a competitor. Two days before his departure, he: Action A: Emails himself copies of research reports he personally authored while at Titan, using his personal email account, to reference the analytical frameworks at his new job. Action B: Writes down from memory a list of his institutional clients' names and phone numbers on paper to contact them after his employment agreement's solicitation restriction period ends. Which action presents a MORE CLEAR violation of Standard IV(A) - Loyalty? A. Action A, because the research reports are firm property regardless of authorship B. Action B, because client lists are always confidential and cannot be recreated from memory C. Both actions equally violate the Standard since both involve using firm resources for personal benefit D. Neither action violates the Standard if James wrote the reports and remembered the client information E. Action A, because electronic transmission of documents is explicitly prohibited pre-departure
Answer
A
Explanation
Action A more clearly violates Standard IV(A) - Loyalty to Employer. Research reports prepared during employment are firm property regardless of who authored them, as they were created using firm resources, on firm time, and in the scope of employment. Taking copies of these documents (even those personally authored) constitutes misappropriation of employer property. Action B is more nuanced: while client lists are typically confidential, information retained purely from memory (not copied from firm systems) generally doesn't violate the Standard, though it may violate employment agreements. The key distinction is that Action A involves taking physical/electronic property (documents), while Action B involves only memory. That said, both actions raise ethical concerns, and James should consult his employment agreement and firm policies. However, Action A is the clearer violation of the CFA Standards regarding employer property rights.