Scenario: A client’s confidential information is used for marketing purposes by an outside firm without consent. Which CFA Institute Standard is violated?

• A. Standard IV.D Performance Presentation
• B. Standard IV.B Fair Dealing
• C. Standard IV.E Preservation of Confidentiality
• D. Standard VI.A Disclosure of Conflicts

Answer: (C)

Preserving client information and not sharing it with outsiders is a fundamental obligation. When a client’s confidential information is used by an outside firm for marketing without the client's consent, that information has been disclosed to a third party without permission. The standard requires that information obtained in the course of professional duties be kept confidential and only disclosed with client consent or when legally required, and it also calls for reasonable steps to protect confidentiality. Using client data for marketing without consent is exactly the unauthorized disclosure the standard prohibits. Other standards address how performance results are presented, fair dealing, and disclosure of conflicts of interest, but they do not govern the confidential treatment of client information.