CFP Board Code of Ethics

Case Study 1: Financial Conflict of Interest

A CFP professional served as the president and owner of an investment advisory firm and had primary responsibility for the financial and investment services offered by the firm. The firm held a private offering to raise money for working capital, marketing, expansion of present facilities, and operating expenses. The CFP professional recommended that clients purchase shares in the private offering. Four clients purchased $2,550,000 worth of shares of the firm, which represented 12.5% of the company.

What rule(s) of conduct were broken? Explain the rule(s) and how it was broken in the case study.

How might you handle this situation differently?