Piedmont scenario: Piedmont developed a stock selection model prior to employment; after leaving, he provides the model to a new employer. Did he violate CFA Institute Standards of Professional Conduct?

• A. No.
• B. Yes, because he misappropriated employer property.
• C. Yes, because he failed to inform his new employer that the model was the same one used by his previous employer.
• D. Yes, because he used the model for his new employer.

Answer: (A)

Ownership of pre‑existing work and the limits on taking it to a new employer are the key ideas here. If a stock‑selection model is created before joining any firm, and it does not rely on the former employer’s confidential information, data, or resources, it remains the personal property of the creator. Recalling that principle, providing the model to a new employer isn’t a misappropriation because no employer property or confidential material is being copied or used without permission.

For a violation to occur, the model would need to incorporate confidential information or trade secrets from a prior employer, or be tied to obligations in a contract or non‑compete that restrict sharing or reuse. Absent those circumstances, sharing a pre‑existing model with a new employer would not violate the CFA Institute Standards.