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Duties to Clients
  • Loyalty, prudence & care: Loyalty to their clients and act with reasonable care and exercise prudent judgment.
  • Fair dealing: Deal fairly and objectively with all clients in all professional activities.
  • Suitability: Make investment recommendations that are consistent with the stated objectives and constraints of the clients' portfolio.
  • Performance presentation: Communication about investment performance must be fair, accurate, and complete.
  • Preservation of confidentiality: Keep information about current, former, and prospective clients confidential unless:

        The information concerns illegal activities

        Disclosure is required by law

        The client or prospective client permits disclosure of the information


Mr. Jayant Patel, CFA is working for Neev Bank and serve Bank's HNI clients. Recently he acquired a new HNI client, to whom Mr. Patel promised shares of the latest hot IPO at the time of acquisition. Is Mr. Patel in violation of CFA standards of professional conduct?


Mr. Patel has violated Standard III(B) fair dealing by offering client IPO shares at the cost of his old clients. Patel is providing investment recommendations before making inquiries about the client's financial situation, investment experience, or investment objectives. Patel is thus violating Standard III(C) – Suitability.

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