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Question:

Do Sergeant's actions violate CFA Institute Standards of Professional Conduct?

A Yes, because Sergeant did not disclose the nature of his arrangement with Chapman to his client.
Explaination

Standard VI Disclosure of Conflicts requires members to disclose to their clients any compensation or benefit received by, or paid to, others for the recommendation of services. Sergeant's failure to disclose that he receives legal services for his referral of clients to Chapman is in violation of the Standards.