...integrity. Our ability to do so rests on the behavior of those who work here, from consultants to employees to our chief executive to our directors. To that end, we select our people based not just on their skills, accomplishments and potential, but also on their principles and values. A commitment to integrity and ethical behavior is a critical factor in our decisions regarding professional advancement and compensation. The firm maintains a Code of Business Conduct and Ethics, supplemented by both our Business Principles and compendium of internal policies, to inform and guide our people in their roles. We recognize, however, that a formal Code or policy cannot cover every situation. In a fast-paced and complex industry and an inherently innovative business, it is impossible to predict the various different unique circumstances our people will face during their careers. As such, the policies outlined in this Code should be viewed as the baseline of expected behavior at the firm. While ethical behavior requires us to comply fully with all laws and regulations, “compliance” with the law is the minimum standard to which we hold ourselves. Those who work with us honor not just the letter of existing laws, but the spirit that underpins and informs them. We recognize that over time what is considered acceptable today may be viewed differently tomorrow. Thus, we do not look to prevailing “market practices” as an indication of appropriate behavior. We base our decisions on legal and regulatory...
Words: 853 - Pages: 4
...crisis of 2007 was primarily due to the collapse of the housing industries subprime mortgage market. Residential mortgage-backed securities are commonly issued bonds that are backed by thousands of residential real estate mortgages. The Goldman Sachs case was comprised of subprime mortgages. Most business organization possess a mission statement, a code of ethics or rules to follow to be able to limit the ethical issues that may arise within the Institution, Goldman Sachs did not have any of these. In exploring ethical behavior in the banking and financial institutions whose sole existent is to increase profits through the sale of consumer loans. In 2005, the banking industry started issuing subprime mortgage loans to consumers regardless of their income qualification. “The collapse in prices precipitated the collapse in banking profits, prompting a call for bailing out the banks. Government bailouts effectively rewarded financial institutions for “bad” behavior” (Watkins, 2011). Bottom line, financial institutions were being rewarded for unethical behavior when they should have been punished. When the financial crisis erupted in 2007, Goldman Sachs gave into pressure from federal regulators to convert themselves into bank holding...
Words: 808 - Pages: 4
...[Type the company name] | Ethical Breaches in the Bank | A Look in the London Whale Scandal | ACC557 Professor Brandy Havens | Kristi Spann | 1/23/2014 | | In recent times, there have been several ethical scandals that, in some cases, destroyed companies. The most infamous scandal was Enron. Enron was an energy company that was formed in 1985. It was the seventh largest energy company in America. According to Forbes.com, the charges related to knowingly manipulating accounting rules and masking the enormous losses and liabilities of the company. Ultimately charges were brought against the company’s high ranking executives including former CEO Jeff Skilling and his successor Kenneth Lay. They were charged with over twenty charges by the SEC (Securities Exchange Commission) and sentence to prison. Unfortunately, Kenneth Lay passed away before he was sentenced. Scandals like as Enron affected many people such as shareholders, employees, customers, and the economy. Shareholders lost their investments, employees lost their jobs, and customers lost their services. With all the losses, the economy was affected. Because of this scandal, Congress passed the Sarbanes-Oxley Act in 2002. Under this law, corporations would be held accountable for their actions. Organizations are required to be transparent. Under the Sarbanes-Oxley Act in section 302, one of the parts that are required by organizations is for the financial reports to reveal any and all internal...
Words: 1567 - Pages: 7
...Unethical Behavior Involved In 2002, CitiGroup Inc. and other top Wall Street securities firms were accused of misleading investors. This misconduct was done by the securities firms’ research divisions. The analysts used biased research to sell stock that they knew were not good buys. The analysts ignored the legitimate research because of concern over from backlash from their investment bankers. They were encouraged to do this by the investment sections of their companies in return for bonuses and stock options. The real research the ten companies did was disregarded completely so that the company would have a better bottom line. In some cases, the analysts recommended stocks that they knew were no good. Citigroup was the parent of Salomon Smith Barney at the time of the ethical misconduct. “At Salomon Smith Barney, analyst Grubman reiterated a "buy" recommendation in February 2001 on Focal, an investment banking client, and a target price of $30 (twice the stock price). The same day, an institutional investor e-mailed a research analyst who worked for Grubman, "McLeod [McLeod USA Inc.] and Focal are pigs aren't they?" and asked whether Focal was a short. The analyst responded, "Focal definitely "" In April 2001, Grubman stated privately the need to downgrade Focal, but nevertheless once again advised investors to buy Focal” (Di Lorenzo, 2006). Some stocks went from $80 to $2 a share but the analysts were still pushing the stock. This went on for months and in some...
Words: 599 - Pages: 3
...stakeholder needs and agendas while they may conflict with what is ethical or socially acceptable it is also something that the stakeholders want to see, a company that is ethical and socially responsible. I chose the financial industry to provide an example on for a time when ethics was questioned. While researching the financial industry, Wells Fargo stood out as one strong player in the industry. Wells Fargo is a nationwide, diversified financial services company with $1.6 trillion in assets. Founded in 1852, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance. They do business with one in three U.S. households. Clearly Wells Fargo is a top player in the financial industry and they have had both ups and downs in the questioning of their ethics. Ethical issues in the financial services industry affect everyone, because even if you don’t work in the field, you’re a consumer of the services. The public seems to have the perception that the financial services sector is more unethical than other areas of business, this misperception persists for several reasons. First, the industry itself is quite large. It encompasses banks, securities firms, insurance companies, mutual fund organizations, investment banks, and mortgage lenders. Because of its vast size, the industry tends to garner lots of headlines, many of which are about their ethical lapses. But these ethical lapses do occur and not just in the financial industry. It becomes...
Words: 913 - Pages: 4
...Effect of Unethical Behavior Article Analysis Damon Jones ACC/291 December 11 2013 Harri Eloranta Effect of Unethical Behavior Article Analysis The purpose of The Sarbanes-Oxley Act is to restore public confidence in both public accounting and publicly traded securities as well as promote better ethical business practices through greater executive awareness and accountability (Siegel, Franz, & O'Shaughnessy, 2010). In the 1990s, many big companies had misleading and outright fraudulent activity on their account financial statements. Essentially, multiple publicly traded companies jacked up their stock prices by “publishing false or deceptive financial statements” according to (Lasher, 2008). The word ethics has many different means to different individuals or groups; however, ethic is a moral principle or set of moral values held by an individual or group (Dictionary.reference, 2013). Unethical behavior forms from an individual’s personal gain or a business trying to make the business look more profitable than it is. One way that companies mislead investors, by using their own accountant doing the books. When an accountant that works for the company does their books without anyone outside of that company overseeing them, gives them a lot of room to move figures around. The Sarbanes Oxley Act of 2002 is an overseer and protector for investors. The Act has many effects of interest to financial service professionals. It increases the reliability...
Words: 401 - Pages: 2
...Banking Industry Meltdown HRM 522/ Professor Huddleston 2013 August 22 Banking Industry Meltdown 1 Determine which moral philosophies (as discussed in chapter 6) are most applicable to an understanding of the banking industry meltdown. Explain your rationale. To suggest which moral philosophy is most applicable to this case we must have an understanding of moral philosophies. One definition given is that “Moral philosophy is the study of moral judgments or the value that is placed on decisions about what is right or wrong” (http://www.smallbusiness.chron.com). With this being said, one must understand that there is a difference between moral philosophies and business ethics. When we refer to an individual’s principles and values which help to define and determine what is considered to be moral or immoral, this is known as moral philosophy. Business ethics is usually based on decisions in groups or those made when carrying out tasks to meet business objectives (Fraedrich/Ferrell, page 151). We can use moral philosophies as guidelines or a blueprint to aid in “determing how conflicts in human interests are to be settled and for optimizing mutual benefit of people living together in groups” (Fraedrich/Ferrell, page 151). Moral philosophies also used in the business world to formulate business strategies as well as a way of resolving ethical issues. The moral philosophies used in business decisions are teleology, deontology, the relativist perspective, virtue ethics...
Words: 1903 - Pages: 8
...JOURNAL OF ECONOMIC ISSUES Vol. XLV No. 2 June 2011 DOI 10.2753/JEI0021-3624450213 Banking Ethics and the Goldman Rule John P. Watkins Abstract: Insulating people from the effects of the crisis has left intact the habits of thought and the basic institutional structure. The continued reign of pecuniary values leaves intact the Goldman Rule: pursue profitable opportunities regardless the effects on others. Within a culture dominated by pecuniary values, profitable opportunities present a coercive force. Laissez-faire policies allow profitable pursuits without restraint. Subprime mortgages offered an opportunity to tap a new source of profits, namely, the increase in housing prices. Many financial institutions engaged in unscrupulous actions to convert household wealth into corporate profits. Efforts to reign in the industry remain wanting. Keywords: acquisitive society, banking ethics, banking profits, Goldman Sachs, subprime crisis JEL Classification Codes: A13, B25, B26, D63 The bailout of the banks violates the legitimacy of markets, the ethos that profit represents the reward for success, loss the punishment for failure. The outrage over bailouts combined with insulating people from the effects of the crisis has fostered an anti-interventionist reaction and a resurgence of neoliberalism. Insulating people from the effects of the crisis has largely left intact the habits of thought and the basic institutional structure. The continued reign of pecuniary values leaves...
Words: 3823 - Pages: 16
...Islamic Banking Malek Alraddadi 02-24-2014 FIN-610 Introduction This study debates upon the history of Islamic banking. What are the ethical issues involved in the implementation of Islamic banking. Since the birth of Islam what type of steps are taken and by whom these measurements were taken. Besides this this paper also declares the response and customers point of view regarding Islamic banking with the help of different studies. History of Islamic banking The term Islamic banking got regular in the 1960's, however the systems and thoughts of the framework were suggested and operated since the beginning of Islam. Numerous studies and explores have indicated that Islamic money components were utilized within the Muslim world all around the Middle Ages; in leading exchange and business exercises. Charging investment on credits was not regular in those days. The first run through investment bearing credits were generally utilized within the Muslim world, particularly in the Middle East, was throughout the Ottoman Empire's governed in the fifteenth century. Mehmet Ebusuud Efendi, the senior Islamic minister of the Ottoman Empire, issued a fatwa (decision) permitting the charging of investment and thinking of it halal (allowable) as long as it was underneath 10%. Despite the fact that it was clear in The Holy Quran that investment was strictly disallowed, practically nobody could challenge the senior Islamic priest's decision since testing him might mean testing the...
Words: 1810 - Pages: 8
...LITERATURE 2.1 Banking A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses. Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had its roots in the ancient world. In the history of banking, a number of banking dynasties—notably the Medicis, the Fuggers, the Welsers, the Berenbergs, and the Rothschilds—have played a central role over many centuries. The oldest existing retail bank is Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank. In general terms, the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit is called banking. Money is normally lent out for a charge called interest. However, with the passage of time, the activities covered by banking business have widened and now various other services are also offered by banks. The banking services these days include issuance of debit and credit cards, providing safe custody of valuable items, lockers, ATM services and online transfer of funds across the country / world. However, with the passage of time, the activities covered by banking business have...
Words: 2252 - Pages: 10
...Running head: BUSINESS RESEARCH ETHICS 1 Business Research Ethics RES 351 February 28, 2013 BUSINESS RESEARCH ETHICS 2 Business Research Ethics Before the debt crisis of 2008 exploded, one of the two American banks that backed a large portion of United States mortgages was fined in 2006 because of improper accounting practices. Ethics are a set of standards derived by individual or company ideals of what is right and wrong. Looking back, it should have been clear the poor ethics of this bank would contribute to the economic disaster that would follow. A report conducted by the Office of Federal Housing Enterprise Oversight (OFHEO) from 1998 to 2004 discovered that Fannie Mae’s senior management deliberately influenced improper accounting by swaying internal auditors resulting in undeserved large bonuses. This was accomplished without advising any stockholder or other interested parties; the rest of the world. During this time, Fannie Mae reported unfettered profit growth and reaching publicized earnings targets per share for each quarter. "The image of Fannie Mae as one of the lowest-risk and 'best in class' institutions was a façade" (Fannie mae: Unethical, 2006). During this investigation, Fannie Mae evaded the OFHEO further adding to their harsh fine levied by them and the Securities and Exchange Commission. Fannie Mae’s mismanagement, manipulation of earnings, and unhindered growth culminated in $10.6 billion in losses, “well over a billion dollars in expenses...
Words: 1200 - Pages: 5
...Aristotelian virtuous ethics......................................................... 7 CODE OF ETHICS ................................................................... 7 ETHICAL BEHAVIOR .............................................................. 8 CODE OF ETHICS IN FINANCE AND ETHICAL BEHAVIOR................................................................................... 8 ETHICS IN FINANCE IN DIFFERENT FIELDS ................... 8 NEED OF ETHICS IN FINANCIAL MARKET, SERVICE INDUSTRY AND PEOPLE IN ORGANIZATON: ......................................................................................................... 9 SOCIALLY RESPONSIBLE INVESTMENT ....................................................................................................... 10 ETHICS V/S FINANCE .............................................................. 10 IS FINACE ETHICALLY NEUTRAL ...................................... 11 CORPORATE SOCIAL RESPONSIBILITY ............................11 CONCLUSION.............................................................................. 11 ETHICS IN FINANCE "We can count, but we are rapidly forgetting how to say what is worth counting and why.” -JOSEPH WEIZENBAUM Introduction- ETHICS- Ethics is the study of human behavior which is right or wrong. In general, ethics means doing right things to others, being honest to others, being fair and justice to others. Ethics is a requirement for...
Words: 3473 - Pages: 14
...as a result of passage of the Gramm-Leach-Bliley (GLB) Act. Provided these entities hold strong capital positions and possess sound management, they are permitted to bring together under the same corporate umbrella, commercial banks, investment banks, insurance companies, and selected other affiliated companies that are “financial in nature” and “compatible” with banking (www.mheducation.com). The FHCs come closest to mirroring the organizational structures and service menus of leading European banks, such as Deutsche Bank AG of Frankfurt and HSBC Holdings based in London, by offering the broadest array of services of any financial-services provider (www.mheducation.com). With joint approval of the U.S. Treasury Department and the Federal Reserve Board the menu of services FHCs can offer may be expanded in the future. As the twenty-first century unfolded almost six hundred and fifty holding companies selling services in the United States, including both domestic and foreign-based firms, had qualified as FHCs (www.mheducation.com). While the numbers represent less than ten percent of all bank holding companies registered in the United States, the banking affiliates of FHCs account for more than ninety percent of the total assets of the U.S. banking industry. Many corporations get their initial exposure to international business when they begin to sell or...
Words: 2378 - Pages: 10
...Case 1 ENRON: WHAT CAUSED THE ETHICAL COLLAPSE? case summary | Kenneth Lay, former chairman and chief executive officer (CEO) of Enron Corp., claimed to be a moral and ethical leader and exhorted Enron’s officers and employees to be highly ethical in their decisions and actions. In addition, the Enron Code of Ethics specified that “An employee shall not conduct himself or herself in a manner which directly or indirectly would be detrimental to the best interests of the Company or in a manner which would bring to the employee financial gain separately derived as a direct consequence of his or her employment with the Company.” Enron’s ethics code was based on the values of respect, integrity, communication, and excellence. Given this code of conduct and Ken Lay’s professed commitment to business ethics, one wonders how Enron could have collapsed so dramatically? The answer to this question seems to be rooted in a combination of the failure of top leadership, a corporate culture that supported unethical behavior, and the complicity of the investment banking community. The failure of Enron’s top leadership was evident in the activities of Andrew Fastow, Jeff Skilling, and Ken Lay, all of whom faced multiple counts of criminal activity with respect to their decisions and actions at Enron. Included among these criminal charges were money laundering, wire fraud, securities fraud, conspiracy, making false statements on financial reports, and insider trading. Some of the activities...
Words: 3147 - Pages: 13
...Administration Discipline Khulna University 4th November, 2013 Name of the proposed report: “Green Banking Initiative of Bangladesh bank and Compliance of the Commercial banks” (A Case study based on Khulna City) Introduction: Bangladesh is a country of enormous opportunities. After its liberation war, it has rapidly changed its economic status and in spite of so many obstacles, recently it has introduced itself as a middle income country. But now, along with other countries of the world, it is facing some problems like- global warming, excessive use of carbon-di-oxide and CFC gas, and also some other climatic change and all these are a great threat to our economy. The green banking concept is relatively new in Bangladesh and yet to get momentum. Actually green banking is nothing but the operations of the banking activities giving especial attention upon the social, ecological and environmental factors aiming at the conservation of nature and natural resources. Banks can be green through bringing changes in six main spheres of banking activities (Rahman, et al. 2013). Those are Change in Investment Management, Change in Deposit Management, Change in House Keeping, Change in the Process of Recruitment and Development of Human Capital, Corporate Social Responsibility (CSR), and Making Consciousness Among Clients and General Mass (Rahman, et al. 2013). Green banking, as a concept, is proactive and smart way of thinking with a vision for future sustainability of our only...
Words: 4757 - Pages: 20
