Ruling Disciplinary Committee | 2002 | Misleading Management

DSI Disciplinary Committee ruling (TC 01-06) dated 2002.

The DSI Disciplinary Committee ruled in a case against a Senior Investment Adviser. The complaint concerned engaging in securities transactions for a client without prior authorization, making an unauthorized commitment to that client to offset losses, and submitting a write-off proposal to management that was not a correct representation. The defendant acknowledged that he had misinformed management and made a commitment without consulting his supervisor. The committee counted heavily against the defendant for violating his employer’s trust by failing to act with integrity.

Disciplinary Committee ruling

The Disciplinary Committee found the complaint well-founded as to misleading management and making an unauthorized commitment. Given the seriousness of the facts and the personal circumstances of the defendant, a three-month suspension of registration was imposed. The decision will not be published naming the defendant or former employer.

Articles DSI Code of Conduct applicable: 7.1.1 and 7.1.2

Linkage to DSI Core Principles:

• Core principle 1: Take responsibility.
  The defendant should have taken responsibility for his actions and consulted with management in a timely manner when making commitments to clients.
• Core principle 10: Act honestly
  Submitting an incorrect write-off proposal and misleading management violate the core value of honesty and undermine trust in the industry.
• Core principle 5: Comply with rules
  Failure to follow internal procedures and act outside one’s authority violates the obligation to strictly observe rules and agreements.