Ruling Disciplinary Committee | DSI 2007-05

DSI Disciplinary Committee ruling dated February 26, 2007.

The DSI Disciplinary Committee ruled in a case against a senior Securities Trader. The complaint concerned alleged price manipulation when trading swaptions and the shifting of results between profit centers, thereby presenting the department’s performance more favorably. The investigation revealed that the pricing methodology was coordinated in advance with executives and internal clients, and market information was shared transparently. The committee found that there was disagreement within the organization about appropriate pricing and that there was no convincing evidence of significant deviation or intentional manipulation. The smearing of peak results over several days was deemed improper, but not a systematic violation of integrity standards covered by DSI disciplinary law.

Disciplinary Committee ruling

The Disciplinary Committee ruled that there were no grounds to uphold DSI’s complaint and dismissed the complaint.

Articles DSI Code of Conduct applicable: 7.1.1, 7.1.2

Linkage to DSI Core Principles:

• Core principle 1: Take responsibility.
  The Securities Trader should have taken responsibility for transparency and integrity in pricing and reporting.
• Core principle 10: Act honestly
  Fair and transparent reporting is essential for trust in the financial sector.
• Core principle 3: Act carefully
  Carefulness in reporting results and avoiding the appearance of manipulation is paramount.