Appeals Committee ruling | DSI-2008-01

Integrity and professionalism toward employer

DSI Appeals Committee ruling dated February 8, 2008.

The DSI Appeals Committee ruled in a case in which an asset manager was accused of failing to inform his former employer in a timely manner of an important client’s intention to transfer her portfolio to another asset manager. The asset manager was aware of the potential departure, but did not share this information – at the client’s request for confidentiality – with the ex-employer. The Commission ruled that the ex-employer’s interest in this information was obvious and that withholding it was not justified, even by the invocation of confidentiality. In doing so, the asset manager crossed the boundaries of integrity in dealing with the ex-employer.

Appeals Board ruling

The Appeals Committee ruled that the asset manager’s actions violated Article 7.1.1 of the DSI General Regulations, which focuses on integrity in dealing with employers. However, the complaint was not dealt with substantively because of a procedural error: the prescribed consultation prior to filing the complaint had not taken place. The complaint was therefore not considered.

Articles DSI Code of Conduct applicable: 7.1.1

Linkage to DSI Core Principles.

• Core principle 1: Take responsibility. – The asset manager had a responsibility to act with integrity and inform his former employer of relevant developments in a timely manner, despite the client’s request for confidentiality.
• Core principle 3: Act carefully – Careful and transparent handling of information of great importance to the employer is essential to trust in the industry.
• Core principle 7: Be clear about interests – Failure to share crucial information about the departure of a key client can lead to conflicts of interest and damage trust between employer and employee.