A member uses a client's capital for personal use without consent. Which CFA Institute standard is violated?

• A. Standard II.A Material Nonpublic Information
• B. Standard IV.A Loyalty, Prudence, and Care
• C. Standard I.D Misconduct
• D. Standard I.C Misrepresentation

Answer: (C)

This situation tests the duty to act with integrity and in the client’s best interest. When a member uses a client’s capital for personal use, they break the fiduciary obligation to protect and prioritize the client’s interests. CFA Institute’s Standard I(D) Misconduct explicitly covers unethical actions, including misappropriation of client funds. That standard targets conduct that breaches trust and violates ethical norms, which is exactly what happens when client assets are diverted for personal use. The other standards don’t fit this scenario: it isn’t about material nonpublic information, nor about misrepresentation. Loyalty and care are involved, but the specific label for this type of breach is Standard I(D) Misconduct.