In which scenario might a CFA charterholder be in violation of the fair dealing principle?

A CFA charterholder may be in violation of the fair dealing principle when they disclose information selectively. The fair dealing principle requires that investment professionals treat all clients fairly when it comes to the dissemination of investment recommendations and information. If a charterholder selectively shares information with certain clients while withholding it from others, they are not ensuring an equitable treatment of all clients. This behavior undermines the trust in the investment profession and can create an uneven playing field among investors, violating ethical standards.

The emphasis on fair dealing is particularly crucial in maintaining transparency and integrity within financial practices, ensuring that all clients have access to the necessary information to make informed decisions. In contrast, promoting only the best performing funds does not necessarily imply a violation of fair dealing as long as such recommendations are based on thorough analysis and shared equitably. Recommending high-risk investments can be part of appropriate client advice if aligned with clients' risk profiles, and analyzing all market dimensions is essential for thorough investment analysis.