Appeals board ruling | DSI-2007

Violation of confidential handling of sensitive information

DSI Appeals Committee ruling dated December 3, 2007.

The DSI Appeals Committee ruled on a complaint against an investment adviser working for a bank. The complaint concerned the alleged violation of an internal embargo by referring to an upcoming bond issue (“interest rate variant”) in a telephone conversation with a client, while this information was still under embargo. The adviser argued that he had not made contact on his own initiative and that he was not aware of a violation of the Code of Conduct. The Disciplinary Committee and the Appeals Committee ruled that it was not shown that the adviser intentionally shared confidential information. Merely sounding out interest in a future issue without providing details did not constitute a breach of confidentiality. The complaint was ruled unfounded.

Appeals Board ruling

The Appeals Committee upheld the Disciplinary Committee’s decision and rejected DSI’s appeal.

Articles DSI Code of Conduct applicable: 7.1.1, 7.1.2, 7.2.1, 7.2.2, 7.3.1

Linkage to DSI Core Principles:

• Core principle 6: Ensure confidentiality.
  Careful handling of sensitive information is essential. In this case, there was no evidence that confidentiality was actually breached.
• Core principle 1: Take responsibility.
  The consultant should be aware of his responsibility in handling internal and confidential information.
• Core principle 3: Act carefully
  Carefulness in communicating with clients about non-public information is critical to trust in the industry.