Ruling Disciplinary Committee | DSI 2005-01

DSI Disciplinary Committee ruling dated February 2, 2005.

The DSI Disciplinary Committee ruled in a case against an investment adviser who received private loans from several clients over a long period of time. Despite the fact that the defendant stated that these were friendly relationships, the committee ruled that even before the formal introduction of the relevant regulations, the basic principle was that business and private interests must be kept strictly separate. The defendant did not cease her conduct after the introduction of the regulation and following the DSI integrity modules. The committee charged her severely for failing to demonstrate an understanding of the seriousness of her actions and showing insufficient remorse.

Disciplinary Committee ruling

The Disciplinary Committee found that the complaint was well-founded and imposed the measure of expulsion, in part because of the systematic nature and personal benefit that the defendant received.

Articles DSI Code of Conduct applicable: 7.1.1 to 7.1.5, 7.3.1, 7.3.5

Linkage to DSI Core Principles:

• Core principle 7: Be clear about interests
  Taking loans from clients creates a serious appearance of conflict of interest and damages trust in the industry.
• Core principle 1: Take responsibility.
  The defendant should have taken responsibility for strictly separating private and business interests.
• Core principle 3: Act carefully
  Carefulness and integrity are essential, especially in long-term client relationships.
• Core principle 10: Act honestly
  Honesty and avoiding personal gain from client relationships are fundamental to financial services with integrity.