Ruling Disciplinary Committee | DSI 2016-03

Suspension for serious violation of Code of Conduct

DSI Disciplinary Committee ruling 2016-03 dated December 7, 2016

On December 7, 2016, the DSI Disciplinary Committee ruled on a case against an asset manager. The complaint concerned the insufficient conduct of investigations into India 2 B.V., the failure to inform investors in a timely manner about risks and suspicions of irregularities, and the failure to immediately inform the new employer about the matter after commencing employment.

Disciplinary Committee ruling

The Disciplinary Committee found that the Respondent did not perform sufficient due diligence and did not adequately inform investors about the risks of the investment in India 2 B.V. It was also found that the Respondent intervened too late when there were signs of irregularities and did not immediately inform the new employer. All this was in violation of the requirements of expertise, professionalism and integrity from the Code of Conduct. The committee deemed the complaint founded and imposed a six-month suspension.

Articles DSI Code of Conduct applicable: 7.1.1, 7.1.2, 7.2.1 and 7.2.3

The Disciplinary Committee imposed a six-month suspension. No fine or court costs order was imposed.

Linkage to DSI Core Principles.

• Core principle 9: Show expertise:
  The defendant should have done more thorough research on the investment proposition and the parties involved so that investors could make a responsible decision.
• Core principle 2: Focus on customer interests:
  The customer’s interest should have been the focus, including providing timely and adequate information about risks and suspicions of irregularities.