{"id":51937,"date":"2024-03-13T05:55:13","date_gmt":"2024-03-13T05:55:13","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=51937"},"modified":"2026-02-25T10:59:26","modified_gmt":"2026-02-25T10:59:26","slug":"the-difference-between-ethical-and-legal-standards","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/ethical-and-professional-standards\/the-difference-between-ethical-and-legal-standards\/","title":{"rendered":"The Difference between Ethical and Legal Standards"},"content":{"rendered":"<p><iframe loading=\"lazy\" src=\"\/\/www.youtube.com\/embed\/-yo3RTBtqqg\" width=\"611\" height=\"343\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>The Difference Between Ethical and Legal Standards<\/h2>\n<p data-tadv-p=\"keep\">Often people equate ethical behavior with legal choices.\u00a0 However, there are numerous choices that may be legal but have no moral standing.\u00a0 It is important to remember that all laws stem from a place in which moral covenant has broken down. The means by which control is maintained in these circumstances is to set laws and stipulate punishment. Therefore, the law is reactive.\u00a0 By contrast, ethical conduct is proactive and the means by which standards of practice maintain a high level of morality beyond legality.<\/p>\n<p data-tadv-p=\"keep\">One may adhere to the letter of the law but ignore the spirit of the law. For example, IRS regulations repeatedly single out actions with \u201cno legitimate business purpose.\u201d If an investment professional makes choices with no legitimate business purpose in order to avoid short-term loss (i.e. taxation, fees) then you may be staying within parameters of what is legal, but with no purpose other than to get around the law.<\/p>\n\n\n<div style=\"text-align:center; margin:42px 0 10px;\">\n\n  <a href=\"https:\/\/analystprep.com\/free-trial\/\"\n     target=\"_blank\"\n     rel=\"noopener noreferrer\"\n     style=\"\n        display:inline-block;\n        padding:16px 36px;\n        background-color:#3f78d7;\n        color:#ffffff;\n        text-decoration:none;\n        font-weight:600;\n        font-size:18px;\n        border-radius:40px;\n        line-height:1.1;\n     \">\n     Start Free Trial\n  <\/a>\n\n  <p style=\"\n        margin-top:16px;\n        max-width:680px;\n        margin-left:auto;\n        margin-right:auto;\n        font-size:16px;\n        line-height:1.5;\n     \">\n     Solve CFA-style ethics questions and master the difference between legal and ethical standards.\n  <\/p>\n\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Difference Between Ethical and Legal Standards Often people equate ethical behavior with legal choices.\u00a0 However, there are numerous choices that may be legal but have no moral standing.\u00a0 It is important to remember that all laws stem from a&#8230;<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-51937","post","type-post","status-publish","format-standard","hentry","category-ethical-and-professional-standards","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - 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