Disciplinary committee ruling | DSI 2007-04

DSI Disciplinary Committee ruling dated February 26, 2007.

The DSI Disciplinary Committee ruled in a case against a senior investment adviser. The complaint concerned a client’s request for a substantial sum from her investment assets to be made available for the adviser’s private use, with him instructing colleagues to transfer funds as an authorised representative. When this was refused, the advisor pressured both the client and the former employer with threats and negative publicity. The investigation revealed that the client was initially not fully aware of the size, purpose and terms of the loan. It was also found that the consultant systematically mixed private and business interests and offered no transparency towards the employer or client. The committee heavily charged the advisor for not showing remorse or insight into his reprehensible actions.

Disciplinary Committee ruling

The Disciplinary Committee ruled that there had been a very serious violation of the standards of competence, integrity and care contained in the Code of Conduct. The committee imposed the measure of expulsion.

Articles DSI Code of Conduct applicable: 7.1.1, 7.1.2, 7.1.5, 7.2.1, 7.3.1, 7.3.4, 7.3.5

Linkage to DSI Core Principles:

• Core principle 1: Take responsibility.
  The consultant should have acted with integrity and taken responsibility for strictly separating private and business interests.
• Core principle 3: Act carefully
  Lacking transparency and pressuring a client is contrary to diligence and professionalism.
• Core principle 7: Be clear about interests
  Failure to disclose private interests and creating conflicts of interest damages trust in the industry.
• Core principle 10: Act honestly
  Honesty and avoiding personal gain from client relationships are essential to providing financial services with integrity.