ethics case
DESCRIPTION
Business ethics caseTRANSCRIPT
THE INSTITUTIONALIZATIONOF BUSINESS ETHICS
ETHICAL BUSINESS CHALLENGE
Presented by Group 4
OURTEAM Dinh Thi Kieu Trang
Doan Huong Giang
Ta Thi Ngoc Hanh
Nguyen Trung Hieu
Tran My LinhNguyen Thanh Minh
Le Dinh Minh
Dao Minh Ngoc
THECONTENT
CASE SUMMARY
ISSUES
ADVANTAGESDISADVANTAGES
PRESSURE
CASESUMMARY
CASESUMMARY
This is Albert Chen And Mary – his wife
Obtain prestigious brokerage jobs in the New York area
Learn to add some expenses to their professions such as try to “look” and “act” successful
Also used a strategy: get information from people with a little alcohol in their client gain significant profits in their portfolios
CASESUMMARY
Albert’s uncle
Albert had an uncle working as a janitor
He gave Albert access to many law offices had information on a number of companies,
especially those about to file for bankruptcy
The Chens use these information to benefit their clients’ portfolios
Albert was given permission to buy and sell non-risky stocks at will from his uncle’s friends
CASESUMMARY
The Chens soon have enough money to make their own investment, including Mary’s father.
Mary learned from her father that his company is having problem with the old management
With this information, Mary told her clients who in turn did well on the stock
He talked to his best venture-capital friends when he saw a very hot IPO attract some larger players in the market.
Being a player in IPOs of Albert’s companies:
Barry, Chen’s friend, help Albert place Chen’s trade before the client order
CASESUMMARY
some of broker send email
with off-color jokes and nude photos
Mary forwarded these email without a glance
Weeks LaterThat person were found and fired
Mary did forward messages that contained such material, so the head of her division decided to fire her
Because of this mess, SEC wanted to check all her trades for the last 8 months
CASESUMMARY
Albert’s parents flew to US from China
offered a house in Taiwan when things go bad
This did not appeal to Mary which really exacerbate the situation
CASESUMMARY
Albert tried to make up for the loss by trading in some high risk markets (commodities and precious metals) But many of these investment evaporated. The investment of him, as well as his clients, was a big mess
Some of his uncle’s friends’ portfolios were losing significant value.
CASESUMMARY
Barry asked for inside information
on several companies that Albert was working with for an IPO
This could be construed as insider information Albert said no
Weeks laterBarry called for Mr. Chen again
ask for the IPO information as an order, not a request
CASESUMMARY
ask for a specific order to buy the stock as soon as possible and sell stock when the price goes to $112
Albert will receive a little bonus for that action.
Albert’s supervisor
FIRSTGAME
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FIRSTGAME
CORPORATE INTELLIGENCE
SEXUAL HARASSMENT
INSIDER TRADING
OMISSION LYING
CONFLICT OF INTEREST
LAW REGULATING COMPETITION
LAWS PROTECTING CONSUMERS
ISSUESOF THE CASE
CASE’SISSUES
EthicalIssues
Corporate Intelligence
SexualHarassment
InsiderTrading
OmissionLying
Conflict ofInterest
CASE’SISSUES
CORPORATEINTELLIGENCE
involves an in-depth discovery of information from:• corporate records• court documents• regulatory filings
• press releases• any other background information that can be found about a company
Physical Hacking: Albert’s uncle whose work as a janitor gave him access to many law office that had information on a number of companies, especially those about to file for bankruptcy.
CASE’SISSUES
SEXUALHARASSMENT
Mary had already known that the mail included some nude photos, anyone’s private images. However, she did not seem to care, forwarded it without opening, which might cause many consequences unpredictably.
INSIDERTRADING
When Albert saw a very hot IPO, he would talk to some of his best venture-capital friends, who then bought the IPOs and gained some very good returns.
CASE’SISSUES
OMISSIONLYING
CONFLICTOF INTEREST
When Albert has financial problem, he invested in some high-risk market using his own money as well as those of his clients. He did it purposefully without informing to his clients, especially his uncle’s friends, who just agree to buy and sell non-risky stocks at will.
When Albert chose to invest in high-risk market, he chose his owninterest over the interest of his clients.
CASE’SISSUES
LegalIssues
Law regulating
competition
Laws protecting consumers
CASE’SISSUES
LAW REGULATINGCOMPETITION
Albert had no agreement to take information from law offices, he just steal it easily because his uncle work as a janitor there. Use that information to made profit and to benefit their clients’ portfolios intruded the law regulating competition.
Barry has demanded for inside information on several companies that Albert was working with for an IPO.
CASE’SISSUES
LAWS PROTECTINGCONSUMERS
After Albert and Mary’s income was cut in half, he tried to make up for the loss by: trading in some high risk markets turn all his clients’ portfolio into the black - including his uncle’s friends’ portfolio.
Albert just had the permission to buy and sell non-risky stocks at will. He traded in high-risk markets without informing his uncle’s friends.
SECONDGAME
SECONDGAME
Discuss about advantages and disadvantages of Albert Chen’s decisions
ADVANTAGESDISADVANTAGES
ADVANTAGESDISADVANTAGES
ISSUE 1
• Using alcohol to have valuable information
• His uncle give Albert access to many law offices that had information on a number of companies
• Use information to benefit their client’s portfolio.
AdvantagesBecause of having known information about many companies, Albert can decide buying and selling stock in the right times. Make benefit for clients’ portfolios. Invest in the market and take a lot of profits for himself.
Disadvantages• His action is unethical and even illegal because Albert had no agreement to take information from law offices• If Albert is detected, he may lose a lot of money and goto jail
ADVANTAGESDISADVANTAGES
ISSUE 2
Albert, who holds IPO information, would talk to some of his best venture-capital friends, who then bought the IPOs and gained some very good returns.
Advantages• Albert have sold some hot IPOs to his venture-capital friends to get money and attract some larger players in the market• Have many valuable friends and his career can develop fast
Disadvantages• This action is considered as insider trading which is unethical• If Albert is detected, he may lose a lot of money and face legal problems .
ADVANTAGESDISADVANTAGES
ISSUE 3
One of Albert‘s friends was Barry, who worked on the stock floor. As they were talking, Barry mentioned that if Al wanted to, he, as a favor, when placing orders to buy shares, would occasionally put Albert’s or Mary’s trade before the client order.
Advantages• Benefit Albert
Disadvantages• Illegal and unethical• Somehow Albert will depend on Barry in the future
ADVANTAGESDISADVANTAGES
ISSUE 4
Albert tried to make up for the loss by trading in some high risk markets such as commodities and precious metals. many of these
investments turned sour. He found himself buying and selling more and more to pull his own portfolio, as well as those of his clients, into the black.
Advantages• Higher risk, higher return can make a lot of money
Disadvantages• If his risky portfolio lose significant value, he can make his loss worse• When Albert chose to invest in high-risk market, he chose his own interest over the interest of his clients. This is considered as a conflict interest issue, so his decision is unethical.
ADVANTAGESDISADVANTAGES
ISSUE 5
Barry has demanded for inside information on several companies that Albert was working with for an IPO. Barry had helped him a lot in placing his orders to buy shares before the client order
If Agree If Disagree Advantages - Keep in touch with
Barry. And Barry will continue to help him put his trade before the client order
- Barry won’t delate the collusion with him in the past
- Keep this information in secret, make fair in the market to all others IPO investors
ethical + legal
ADVANTAGESDISADVANTAGES
ISSUE 5
Barry has demanded for inside information on several companies that Albert was working with for an IPO. Barry had helped him a lot in placing his orders to buy shares before the client order
If Agree If Disagree Dis-Advantages
- Get more favor from Barry who will benefit from it.
- Commit insider trading which is considered as an unethical and illegal issue
-Break the relationship with Barry (may be some others friends)- Financial loss- Barry may delate Albert and he will get exposed for spinning (unethical and illegal)
ADVANTAGESDISADVANTAGES
ISSUE 6
Albert, are asked by his supervisor to buy some stock as soon as the market open tomorrow for a few of his friends and him. They would pay the tax and pay Albert as a bonus.
If Agree If Disagree Advantages - Make some money
to make up for the his wife jobs
- Maintain a positive relationship with his supervisor
- Ethical feel relieve + comfortable- Legal stay away from legal problems
ADVANTAGESDISADVANTAGES
ISSUE 6
Albert, are asked by his supervisor to buy some stock as soon as the market open tomorrow for a few of his friends and him. They would pay the tax and pay Albert as a bonus.
If Agree If Disagree Dis-Advantages
- Get more favor from his supervisor after that
- Possibility to face to the court because of violating the law
- Lose the chance to make some money
- Damage the relationship with his supervisor, which could make his jobs harder as he already had plenty of troubles
PRESSUREOF ALBERT CHEN
ALBERT CHEN’SPRESSURE
INTERNAL PRESSUREPressure 1
ALBERT REPUTATION AND CREDIBILITY
Through his trading and strategies, he has gain a lot of reputation and credibility. He is even a player in IPO of new companies.
Pressure 2ALBERT INVESTMENT
Albert chose to invest in some high-risk markets and many of these investment turned sour. Moreover, he pulled his portfolio further into black.
ALBERT CHEN’SPRESSURE
EXTERNAL PRESSUREPressure 1
ALBERT’S CLIENTS
Albert invested for clients’ portfolio without permission. Moreover, these investment turned into black which means that a lot of pressure is coming to him.
Pressure 2FRIENDS AND RELATIVES
Many of his uncle’s friends’ portfolios were losing significant value.
Barry asked for some inside information on several companies that he was working with for an IPO. Barry demanded it very concrete. This is considered as insider trading if Albert does the favor.
Pressure 3ALBERT’S SUPERVISOR
The supervisor asked Albert to do a specific order on a stock. This is quite suspicious as the detail of the order is so specific that Albert could be the one getting the heat. There may be a stock price manipulation.
OUTSIDER
ALBERT CHEN’SPRESSURE
EXTERNAL PRESSUREPressure 4
MARRY
She was fired and being under investigation by SEC which could turn out that she has violate many laws. Besides the salary was cut in half, the legal court could cost Albert even more money. Moreover, Marry may never got the same job again.
Pressure 5ALBERT’S PARENTS
Albert’s parents were not happy with his marriage to a non-Chinese woman, Marry.
They offer a place in Taiwan, but it is not appeal to Marry.
FAMILY
Thank you for Listening