Appeals Committee ruling | DSI-2002

DSI Appeals Committee ruling dated June 28, 2002.

The DSI Appeals Committee ruled on appeal regarding the actions of an investment adviser who carried out intraday options trading through the account of his mother (a client of the bank) in violation of the bank’s internal compliance regulations. In the process, an unauthorized overdraft occurred on his mother’s account. The Disciplinary Committee had previously dismissed the complaint, but the Appeals Committee found the actions to be in violation of the Code of Conduct and compliance regulations.

Appeals Board ruling

The Commission overturned the Disciplinary Committee’s earlier decision and declared the complaint as founded.

Articles DSI Code of Conduct applicable: 7.1.1 and 7.3.5

Linkage to DSI Core Principles:

• Core principle 1: Take responsibility.
  By acting through a family member’s account and causing an unauthorized overdraft, the defendant failed to take responsibility for behavior with integrity.
• Core principle 7: Be clear about interests
  Acting through a family member creates ambiguity about business and private interests and can lead to conflicts of interest.
• Core principle 5: Comply with rules.
  Failure to comply with the bank’s compliance regulations is a direct violation of the obligation to strictly follow internal rules.