Appeals Committee ruling | DSI-2009

Violating the principle of fair market conduct

DSI Appeals Committee ruling dated December 15, 2009 (appeal against Disciplinary Committee June 16, 2009)

On December 15, 2009, the DSI Appeals Committee ruled on an appeal against the Disciplinary Committee’s decision of June 16, 2009. The case concerned a former commercial director and shareholder of a financial institution who, prior to broadcasts of a television program, took positions in small funds that were subsequently recommended in the program. Both for clients and privately, these transactions were conducted with knowledge of the impact of the recommendations.

Appeals Board ruling

The Appeals Committee ruled that, as a director, the person concerned was in a managerial position and was responsible for the company’s policies and conduct. By buying shares shortly before the broadcast that he was to discuss on the program, the person concerned acted in violation of the requirements of fair market conduct. The Commission confirmed that this conduct constituted a serious violation of the standards of competence, integrity and honesty contained in the Code of Conduct. The sanction imposed of a three-year suspension and publication of the decision by name was upheld.

Articles DSI Code of Conduct applicable – 7 paragraph 1 (1-3), 7 paragraph 2 (1-3), 7 paragraph 3 (5)

Linkage to DSI Core Principles:

• Core principle 1: Take responsibility
  As a director, the individual had an exemplary role and responsibility to act with integrity and prevent wrongdoing.
• Core principle 10: Act honestly.
  Knowingly influencing market indicators and trading on insider information violates honesty and damages trust in the industry.