Slate Brothers Bank (SBS) serves as a custody bank for a wide range of clients, including many registered investment companies. SBS offers a variety of services to its custody clients, includingcustody, clearing, payment, settlement, and record-keeping functions. SBS charges custody clients an asset-based fee for these services. Pursuant to the banks client agreement, custody clients also agree to reimburse the bank for out-of-pocket (OOP) expenses for items paid by the custodian on behalf of the investor. The bulk of these expenses are related to Society of Worldwide Interbank Financial Telecommunication (SWIFT) messages, a secured messaging network used by banks and other financial institutions.

Although SBS charges custody clients an established rate for SWIFT messages, the rate is greater than the actual cost of providing this service. Mandracken, a vice president at SBS who oversees clientservices responsibilities for the custody clients, recognizes this discrepancy and brings it to the attention of his supervisor. In an email, Mandracken states that although SWIFT resides in the OOP language of most client fee schedules, the fees have always include an increase over true costs so that the SWIFT fee is not a true pass-through to the client because we tack on a margin. Mandrackens supervisor directs him to reduce the SWIFT rate for new custody clients and to revisit the rate for existing custody clients during contract renegotiations. To be consistent with his obligations under the CFA Institute Code of Ethics and Standards of Professional Conduct (Code and Standards),.

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Considering CFA Ethical Standards I through Standards IV, which of these, if any, may Mandraken be violating? What are Mandrakens ethical responsibilities to clients?