Ruling Disciplinary Committee | DSI 2007-07

DSI Disciplinary Committee ruling dated June 14, 2007.

The DSI Disciplinary Committee ruled in a case against an investment adviser. The complaint concerned structurally passing on confidential client data to an unregulated institution and actively recruiting clients for this party, as well as violating the internal private investment transaction regulation by trading on his mother-in-law’s account without the required permission from Compliance. The committee found that on several occasions the Respondent alerted clients to the possibility of investing through the unregulated institution and transmitted their details, which was not in accordance with the Code of Conduct. In addition, it was found that the Respondent structurally traded on his mother-in-law’s account without prior approval, despite being aware of the rules.

Disciplinary Committee ruling

The Disciplinary Committee deemed the complaint founded and imposed the measure of a six-month conditional suspension with a two-year probationary period and a fine of €1,000.

Articles DSI Code of Conduct applicable: 7.1.1, 7.1.2, 7.1.4, 7.3.2, 7.3.3, 7.3.4, 7.3.5

Linkage to DSI Core Principles:

• Core principle 6: Ensure confidentiality.
  Communicating confidential client information to third parties violates safeguarding confidentiality.
• Core principle 1: Take responsibility.
  The defendant should have taken responsibility for complying with internal and external rules and acted with integrity.
• Core principle 5: Comply with rules.
  Structural violations of internal investment rules undermine trust in the industry.
• Core principle 10: Act honestly
  Honesty and transparency in advising clients and dealing with private transactions are essential to providing financial services with integrity.