Michael Grodi, Booth’s roommate, works for an events firm that promoted and sponsored the research seminar attended by Booth. Grodi requested Booth’s expertise on social media’s so-called “viral” promotions. Booth agreed to help Grodi’s business and received payment for his services. Booth’s work for Grodi occurred outside the normal work hours of his current job.
Booth’s work for Grodi most likely:
A. does not violate the Standards.
B. violates the Standards on opening competitive practice with his employer.
C. violates the Standards because Booth did not receive prior approval from his employer.
Solution: A
Standard IV(A) is the requirement that members and candidates abstain from independent competitive activity that could conflict with the interests of their employer. Booth’s work for Grodi’s event firm occurs outside his work hours. It is strongly recommended that Booth obtain permission from his employer.
I would have personally went for C. Why? Because Standard IV(A) also says:
Independent practice for compensation is allowed if a notification is provided to the employer fully describing all aspects of the services, including compensation, duration, and the nature of the activities and the employer consents to all terms of the proposed independent practice before it begins.
So, why is C not correct? 
Does Booth’s employer offer social media viral promotion services?
This would be the full/rest of the text:
Fraser Booth is a Level III CFA candidate working as a research analyst at Superior Investments, an asset management company domiciled in Country A. Local securities law prohibits firms and employees of those firms from holding, purchasing or otherwise trading in securities that have published recommendations regarding those securities.
Booth attends a research seminar covering several topics regarding all of the utilities in Country A’s economy. Two topics of interest to Booth address regional utilities, which typically pay large dividends, and the impact that a proposed tax rate change might have on the future payment of dividends. While tax rate changes have yet to be confirmed, Booth lowers the price targets on the most prominent utility in Country A and the other utilities he covers, citing concerns on potential tax rate changes without
attributing the source in the research reports.
Booth has always been bullish regarding the Country A economy’s ability to grow, but during the conference, a highly regarded economist’s presentation convinces Booth that his growth assumptions may not materialize. Consequently, Booth modifies his research reports and cites the economist’s presentation as the reason for his change of outlook.
Booth’s uncle, who currently is a board observer at one of the utilities, agrees with the
conclusions of the report. Booth’s uncle has an account at Superior and is the reason
Booth personally holds shares on the most prominent utility in Country A.
So . . . the answer to my question is . . . ?
Not competing… I understand, I thought, though, that you need prior approval regardless of whether it is in the same industry or having same or a similar occupation, as long as it could constitute a conflict of interest, be it because of the pay, or because you could maybe neglect your duties under your “main” job and dedicate more time to the other?
If it’s not competing and it’s on your own time, you don’t need to report it, and you especially don’t need permission.
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