Ethics Q Disclosing confidential client info to CFAI management, activities, all, themselves

nixie24

According to the SOPH, which of the following activities is least likely to breach a member’s duty to a client?
A. Failing to disclose all forms of manager compensation.
B. Using soft dollar arrangements to pay firm management expenses.
C. Disclosing confidential client information to the CFA Institute Professional Conduct Program.
According to the solutions, the answer is C. “Members should consider the Professional Conduct Program as an extension of themselves when requested to provide information about a client in support of a PCP investigation into their own conduct.”
However, consider the following question:
According to the SOPH, a member who is an investment manager is least likely to breach his duty to clients by:
A. Disclosing confidential client information to the CFA Institute Professional Conduct Program.
B. Using clientbrokerage to purchase goods or services that are used in the investment decisionmaking process.
C. Consistently supporting management’s recommendations by voting with management on proxies related to nonroutine governance issues.
Given the answer to the first question above, I expected “A” to not be a breach of a member’s duty to clients. However, the answer they give is “B”. They explain why “B” is not a breach of duty to clients, but do not mention anything about why the answer is not “A”. Is this a mistake? Do you think “A” would be an acceptable answer here?
Thanks!

dcfox83

I remember that second question, selecting A based on your same reasoning, and being disappointed.
Maybe A is less likely in this case because it really would be a breach of ‘duties to clients  confidentiality’ if the disclosure was made when it wasn’t requested? Or more information was disclosed than was required by the investigation?
I seem to be posting on here a lot… I think I’m distracting myself from doing questions.

farrukhsadiq

* “less likely” = “more likely”

jim8z3

From what i have been seeing with Ethics and having done almost 100% in qbank because it was my weak spot (not anymore), you CAN disclose info to CFAI , but most likely will be in an event of an investigation. To do so on other terms may be more questionable, i dont know. But it looks like you are faced with a right answer and a more right answer. I think there are instances in which disclosing client info to CFAI may be a breach, but under certain circumstances it is not. you can always use the soft dollar cost to help your clients.