Ruling Disciplinary Committee | DSI 2018-04

Fine for careless handling of confidential information – II

DSI Disciplinary Committee ruling 2018-04 dated June 19, 2019

On June 19, 2019, the DSI Disciplinary Committee ruled in a case against a former Senior Asset Manager and CEO of a financial institution. The complaint concerned the careless handling of confidential information about the introduction of the Ultimate Forward Rate (UFR) by De Nederlandsche Bank (DNB), which came to the company and the defendant via the Association of Insurers.

Disciplinary Committee ruling

The Disciplinary Committee found that the Respondent should have been aware that the confidential information, obtained through the Alliance, was not intended to be used to conduct transactions that served the company’s commercial interest. The defendant failed to consult compliance and did not prevent the confidential information from being used for market transactions. Also, as CEO, the defendant had an exemplary role and was required to ensure that his subordinates complied with the Code of Conduct. The committee took into account the fact that the actions occurred nearly seven years ago, but found the complaint partially justified.

Articles DSI Code of Conduct applicable: 7.1.2 and 7.1.3

The Disciplinary Committee imposed a fine of €2,000 on the Respondent. No order for costs of proceedings was imposed.

Linkage to DSI Core Principles.

• Core principle 1: Take responsibility:
  As a board member, the Respondent had an exemplary role and was required to take responsibility for handling confidential information with integrity and complying with the Code of Conduct.
• Core Principle 6: Ensure confidentiality:
  Sharing and using strictly confidential information to carry out transactions violates the standard of carefully handling confidential data within the financial industry.