Ruling Disciplinary Committee | DSI 2009-01

Violating principles of fair market conduct

DSI Disciplinary Committee ruling dated June 16, 2009.

On June 16, 2009, the DSI Disciplinary Committee ruled on a case against a former commercial director and shareholder of a financial institution. The complaint concerned the structural performance of securities transactions in violation of fair market conduct, whereby prior to broadcasts of the television program Business Class, positions were taken in small funds that were subsequently recommended in the program. These transactions were conducted both for clients and privately, and were done with knowledge of the impact of the recommendations. The defendant, as a manager, took no action to prevent abuses.

Disciplinary Committee ruling

The Disciplinary Committee ruled that this conduct constituted a serious violation of the standards of competence, integrity and honesty contained in the Code of Conduct. The conduct damages investor confidence in the fairness of the securities market and shows an impermissible role model. The committee deemed the complaint founded and imposed a three-year suspension, plus publication of the decision by name on the DSI website.

Articles DSI Code of Conduct applicable: 7.1.1, 7.1.2, 7.1.3, 7.1.4, 7.1.5, 7.2.5, 7.3.1, 7.3.2 and 7.3.3

Linkage to DSI Core Principles:

• Core principle 1: Take responsibility.
  As a manager, Respondent had an exemplary role and responsibility to act with integrity and prevent wrongdoing.
• Core principle 10: Act honestly.
  Knowingly influencing market indicators and trading on insider information violates honesty and damages trust in the industry.