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The Standard

Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence. 

Test your understanding of Standard I(D)


Standard I(D) addresses all professional conduct that reflects poorly on the reputation, integrity, or competence of members and candidates. Any act that involves lying, cheating, stealing, or other dishonest conduct is a violation of this standard if the offense reflects adversely on a member’s or candidate’s professional activities. Although CFA Institute discourages any sort of unethical behavior by members and candidates, the Code and Standards are applicable to conduct or activities related to a member’s or candidate’s professional responsibilities—the obligations and duties members and candidates must fulfill as part of their work.

The terms “professional activities” and “professional conduct” appear in the Code and Standards. For the purposes of the Code and Standards, engaging in “professional activities” is synonymous with “professional conduct.” A professional activity is any activity or conduct that relates to financial analysis, investment management, security analysis, stewardship, or other similar professional endeavors and either (1) involves activity or conduct in the workplace or academia or participation in the investment profession or security markets or (2) explicitly or implicitly encompasses the use of the CFA charter or CIPM designation, membership in CFA Institute or CFA Institute local societies, or candidacy for a designation sponsored by CFA Institute.

Whether an action or incident is related to an individual’s professional activities or professional conduct depends on the specific facts and circumstances. Examples of conduct by members and candidates that are considered professional activities under this standard include—but are not limited to—the following:

  • Interactions with colleagues, employees, or clients in the workplace or academia or when participating in the investment profession
  • Activities in which a member or candidate represents to others that he or she is a CFA charterholder, a candidate for a designation sponsored by CFA Institute, or a CFA Institute member
  • Conduct while working as an unpaid officer, representative, or volunteer with CFA Institute or a local society
  • Conduct while attending or participating in a CFA Institute, local society, or industry-related meeting, course, conference, or event
  • Writing about investments or the markets in articles, books, reports, message boards, or blogs outside the workplace or academia
  • Communicating with a government agency, regulator, or other professional organization regarding information within the scope of the member’s or candidate’s professional responsibilities related to the investment profession

Conduct that damages trustworthiness or competence includes behavior that, although not illegal, negatively affects a member’s or candidate’s ability to perform his or her responsibilities. For example, abusing alcohol during business hours might constitute a violation of this standard because it could have a detrimental effect on the member’s or candidate’s ability to fulfill his or her professional responsibilities. Personal bankruptcy may not reflect on the integrity or trustworthiness of the person declaring bankruptcy, but if the circumstances of the bankruptcy involve fraudulent or deceitful business conduct, the bankruptcy may be a violation of this standard.

Individuals may attempt to abuse the CFA Institute Professional Conduct Program by actively seeking CFA Institute enforcement of the Code and Standards and, in particular, Standard I(D) as a method of settling personal, political, or other disputes unrelated to professional ethics. CFA Institute is aware of this issue, and appropriate disciplinary policies, procedures, and enforcement mechanisms are in place to address misuse of the Code and Standards and the Professional Conduct Program in this way.

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Compliance Practices

In addition to ensuring that their own behavior is consistent with Standard I(D), to prevent general misconduct, members and candidates should encourage their firms to adopt a code of ethics to which every employee must subscribe and to make clear that any personal behavior that reflects poorly on the individual involved, the institution as a whole, or the investment industry will not be tolerated.

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Application of the Standard

(Examples 6, 7, 8, and 9 added January 2019)

Example 1 (Professionalism and Competence)

Sasserman is a trust investment officer at a bank in a small, affluent town. He enjoys lunching every day with friends at the country club, where his clients have observed him having numerous drinks. Back at work after lunch, he clearly is intoxicated while making investment decisions. His colleagues make a point of handling any business with Sasserman in the morning because they distrust his judgment after lunch.

Comment: Sasserman’s excessive drinking at lunch and subsequent intoxication at work constitute a violation of Standard I(D) because this conduct has raised questions about his professionalism and competence. His behavior reflects poorly on him, his employer, and the investment industry.

Example 2 (Fraud and Deceit)

Hoffman, a security analyst at ATZ Brothers, Inc., a large brokerage house, submits reimbursement forms over a two-year period to ATZ’s self-funded health insurance program for more than two dozen bills, most of which have been altered to increase the amount due. An investigation by the firm’s director of employee benefits uncovers the inappropriate conduct. ATZ subsequently terminates Hoffman’s employment and notifies CFA Institute.

Comment: Hoffman violated Standard I(D) because he engaged in intentional conduct involving fraud and deceit in the workplace that adversely reflected on his integrity.

Example 3 (Fraud and Deceit)

Brink, an analyst covering the automotive industry, is CEO of a very successful boutique investment research firm. Because she is a prominent member of the community and a CFA charterholder with years of experience in the investment industry, several local charities ask Brink to sit on their board, and she does so as a volunteer. The board of one of the charitable institutions for which Brink serves on the board decides to buy five new vans to deliver hot lunches to low-income elderly people. Brink offers to handle purchasing agreements. To pay a long-standing debt to a friend who operates an automobile dealership—and to compensate herself for her trouble—she agrees to a price 20% higher than normal and splits the surcharge with her friend.

Comment: Brink’s volunteer work for the board of the charitable organization is a professional activity for the purposes of this standard since she serves on the board because of her status as an experienced investment analyst and CFA charterholder. Brink engaged in misconduct involving dishonesty, fraud, and misrepresentation and violated Standard I(D).

Example 4 (Personal Actions and Integrity)

Garcia manages a mutual fund dedicated to socially responsible investing. She is also an environmental activist. As a result of her participation in nonviolent protests, Garcia has been arrested on numerous occasions for trespassing on the property of a large petrochemical plant that is accused of damaging the environment.

Comment: 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.

Example 5 (Misconduct as a CFA Institute Society Volunteer)

O’Hara volunteers at his local society as an instructor at the society’s CFA exam review course for local candidates in the CFA Program. O’Hara engages in inappropriate behavior with several female candidates that includes making suggestive remarks, unwanted touching, and repeatedly asking candidates out on dates despite being rebuffed by them.

Comment: O’Hara is in violation of Standard I(D) by engaging in sexual harassment that reflects poorly on his professional reputation and integrity. Although the actions do not take place in the workplace, O’Hara’s actions are professional conduct within the meaning of the Code and Standards because the conduct takes place as part of his work with the local society and encompasses the use of his charter and membership in the organization.

Example 6 (Identification as a CFA Charterholder)

Nehjer recently retired from a successful career as an economist for an investment adviser to live at her country estate. She maintains active CFA Institute membership with the organization and the local society. A multinational firm has announced its intention to open a large casino within 5 km of her estate. Local officials are balancing the positive economic impact of the casino with the negative effects it will have on the character of the community. Nehjer and her neighbors strenuously object to the casino. She publishes an open letter stating that studies have shown that the positive economic impact of gambling venues is widely overblown. She cites a number of statistics in her letter that she fabricated or altered to help make her point. She signs her name to the letter, indicating that she has a PhD and is a CFA charterholder.

Comment: By engaging in fraud, dishonesty, and deceit in using fabricated and altered statistics in an effort to support her opinion on the casino issue, Nehjer engaged in misconduct and violated Standard I(D). Although she is retired, her actions in this case are professional conduct within the meaning of the standard because she identified herself as a CFA charterholder and explicitly used her charter in an attempt to give her analysis and opinions more credibility.

Example 7 (Writing about Investments Outside the Workplace or Academia)

Mewis is an analyst for an investment advisory firm and a candidate for the CFA designation. She has a strong interest in environmental protection and combatting climate change. She starts a blog in which she provides analysis of investment opportunities and makes stock picks for companies based on her evaluation of their environmental, social, and governance (ESG) factors. Her work with her employer is unrelated to ESG analysis, and her employer gives permission for her to create the blog if her ESG-related work is done on her own time and she does not identify herself as an analyst for the firm. In one of her blog posts, Mewis severely criticizes JKL company for causing substantial harm to the environment in its manufacturing process and having incompetent management. She posts on her blog that the company is likely soon to be the subject of regulatory action and private litigation that will greatly affect JKL’s profitability. Mewis has no knowledge that any of this is true but seeks to damage the company because of a personal dispute with her ex-husband, the CEO of the company.

Comment: Mewis violated Standard I(D) by engaging in dishonesty, fraud, and deceit and in conduct that reflects adversely on her professional reputation and integrity. Although her actions are not related to her employment with the investment adviser, her conduct relates to the candidate’s involvement in the investment profession and security markets.

Example 8 (Actions Unrelated to Professional Conduct)

Tan is a candidate for the CFA designation and a junior analyst working in the downtown office of his employer, QRS Advisers. Because parking is extremely limited, most QRS employees commute to the company offices using public transportation. Tan wants the convenience of driving his own personal vehicle to work. He submits false documentation to government officials indicating that he has health issues that make him eligible for a disabled person parking permit. The government issues his permit, and he regularly drives to work and parks at one of the “disabled person only” spots near his office.

Comment: While Tan’s actions involve dishonesty, fraud, deceit, and lying to government officials, his actions do not fall within the definition of professional conduct for the purposes of application of the Code and Standards. His conduct is, at most, tangential to his employment and does not implicate his participation in the CFA Program or any other affiliation with CFA Institute. As a result, while his conduct is deplorable, it is not “professional” conduct to which the Code and Standards apply.

Example 9 (Actions Unrelated to Professional Conduct)

Mondelo is a well-known security analyst, as well as a devoted follower of a national politician running for high public office. Prior to the election, Mondelo volunteers extensively for this politician. After election day, the opponent of Mondelo’s candidate is declared the winner. The candidate whom Mondelo supports claims that widespread election fraud took place and urges his followers to demonstrate against the election at the nation’s capital on the day his opponent is to be sworn into office. Thousands of followers, including Mondelo, follow the candidate’s direction and join the protest. A large number of demonstrators engage in violence and vandalism of government offices. During their investigation of the criminal activity, law enforcement officials interview Mondelo. He denies engaging in violence or vandalism. However, security cameras and the cell phone videos of other protesters that are posted on social media capture Mondelo fighting with police, setting fire to vehicles, and yelling racial slurs at supporters of the newly elected candidate. Mondelo’s subsequent arrest makes national news because of his prominence in the investment industry, and he is fired from his job.

Comment: Mondelo’s violent actions during the protest and lying to government investigators about his actions involve dishonesty and deceit and call into question his integrity and character. However, although he is fired from his job, the activity is not related to his employment or his participation in the investment profession and is unrelated to his charter or any affiliation with CFA Institute. As a result, his activities related to this event do not amount to professional conduct within the meaning of the Code and Standards and are, therefore, not covered by Standard I(D).

Should Mondelo be convicted of a crime that is punishable by more than one year in prison for any actions, including those that arise out of his conduct at the election protest, he could be summarily suspended from CFA Institute under the Rules of Procedure for Conduct Related to the Profession (as amended and restated 1 January 2022).

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About the Author(s)

CFA Institute

CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion of ethical behavior in investment markets and a respected source of knowledge in the global financial community. Our aim is to create an environment where investors’ interests come first, markets function at their best, and economies grow.

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