This case relates to what constitutes professional misconduct. CFA Institute Standard I(D): Professional Misconduct prohibits CFA Institute members from engaging in any professional conduct involving dishonesty, fraud, or deceit or from committing any act that reflects adversely on their professional reputation, integrity, or competence. Generally, Standard I(D) is not meant to cover legal transgressions resulting from acts of civil disobedience in support of personal beliefs because such conduct does not reflect poorly on the member’s or candidate’s professional reputation, integrity, or competence. The fact that Simpson is arrested in the financial district is not a sufficient nexus to his professional activities to render his actions a violation of the Code and Standards.
The Code of Ethics requires members to promote the integrity and viability of global capital markets for the ultimate benefit of society. But Simpson’s climate protests are not related to the global capital markets. Misconduct with the supposed intent of benefiting society would not be shielded by the Code of Ethics. It is also irrelevant that Simpson’s climate protests are somewhat in line with his professional activities in managing an ESG fund. Finally, Simpson’s arrest does not seem to be an automatic violation of bank policies. Although Simpson’s employment contract gives the bank the option of firing him for criminal activity, the bank can apparently use discretion in retaining employees depending on the nature and circumstances of the conviction. Furthermore, the Code and Standards are not automatically violated with every violation of an employer’s employment policies, unless the violations relate to underlying conduct addressed in the Code and Standards. In this case, choice E is the best response.
This case relates to a question submitted to the CFA Institute Ethics Help Desk.