Business Comparative Ethics Responsibility -Myassignmenthelp.Com

Question: Discuss About The Business Comparative Ethics Responsibility? Answer: Introducation Information gathering techniques resembling those of Rajaratnam are still practiced on Wall Street. Any business goal or intention is to make money. As much as insider trading is unlawful, people tend to forget that and solely focus on its advantage when it comes to generating quick money (Akwera, 2010, p. 178-179). However, no one wants to be prosecuted for insider trading, so people have become more careful and look for ways to disguise it so as to avoid the penalties associated with the act. News about charges against Rajaratnam of Galleon Group concerning insider trading generated jokes on Wall Street. The vulnerable finance professionals are electricians; due to their common task of finding out if phones or landlines are being tracked by the FBI. Brooklyn Bridge area was where traditional insider trading used to take place. Ivan Boesky, a financial executive, was convicted in the 1980s for exchanging information that was not available to the public in person. As the saying goes, there is some truth that lurks in rumors or jokes. A lot of rumors have been doing rounds about how people benefit from Wall Street through insider trading evident in their massive accumulation of wealth (Granhag, Vrij Meissner, 2014, p. 815-816). Barton Biggs, a strategist veteran investment, narrates the operations undertaken by a hedge fund in his Hedge Hogging that was published in 2006. In a particular chapter known as Divine Intervention or Inside Information? he narrates a certain stockbrokers story, Judson Thomas, on how he has the insight of knowing tomorrows market trends today hence becoming a celebrity. Some media articles argued that prosecutors will have it hard proving Rajaratnam and the others with similar charges guilty. They argue that it is hard to differentiate between information gathering that is legal and illegal data sourcing that is not to be disclosed. However, ethics was breached since Rajaratnam used information that was not available to the public in prospective earnings. Majority of MBA programs insist that students take an ethics course, where cases of illegal insider trading are taught in detail. Likewise, all Chartered Financial Analysts, including numerous who are working for Wall Street, are expected to pass an exam on ethics (Fuld, 1995, p.10). It is expected that majority of the students did not take their ethics course with the seriousness required. However, the tutors played their role of informing them of the dos and donts of inside information and the expected consequences in case one breached the law. Moreover, Rajaratnams funds that are registered with the Securities and Exchange Commission (SEO) are expected to possess codes of conduct where employees swear to avoid trading on inside information. Success and character It is hard to fathom why talented and smart people who can easily acquire wealth through ethical means, engage in unlawful acts like illegal insider trading at times for relatively small gains. It could be greed for money or the fact that they assume that they are too smart to be caught (Bull by the horn, 2013, p. 50). The fact that they are able to hire renowned lawyers and regulators makes those involved in trading information illegally believe that they can avoid legal scrutiny. Managers also assume that even if their companies attract investigations from the FBI and SEC, an individual analyst would be found to have acted on their own accord without involving the manager. After all, individuals want to benefit from offering consulting services without having to share the money out. David Swensen, in his message through the Financial Times (October 10, 2009), says that character and quality of a person are most important. Swensen, who is running Yales $16 billion endowments, looks at individual performance record when hiring fund managers. Referring to Wall Street, is it easy to sell out ones character using their past? Swensen joked about interviewing ones high school teacher before employing them. Warren Buffet, who is the CEO of Berkshire and a very successful investor, talks about the choice of character and how it can make one successful or fail, during his Wharton speech in 1999. He further said that forming acceptable habits includes developing integrity and trustworthiness (Bar-Isaac, Caruana Cunat, 2012, p. 162-185). People who stray from the right habits appear on Wall Street and may shine initially, but at the end, they fall, which doesnt have to happen. Buffet insists that energy, integrity, and intelligence are all fundamental to success. Investors to watch for Red Flags It is very hard for investors to sell out the companies involved in insider trading because a company cannot just confirm to be practicing the illegal information gathering technique. It is however important for regulators to watch out for any suspicious dealings within investor companies like making the abnormally huge amount of money and sudden changes regarding buying or selling stock. Moreover, employees should be thoroughly warned of the dire consequences associated with insider trading. Rajaratnams case shows some red flags, especially that of 2005 where his company paid $800,000 as fine for improper profit acquisition in shorting stocks, to SEC. The fine raises eyebrows on the diligence of investors who invested billions in Galleon, despite getting the SEC incident was exposed (Rajaratnam, 2016, p. 183-210). Investors and regulators may not be able to 100% tell the credibility of a company, but it is vital to always be on the lookout for red flags. Any improper activity or abnormal investment gains should get investors running. When investors avoid companies that do not look or sound credible, illegal insider trading will reduce because financial analysts require as many investors as they can get, to grow. News reports indicate that more people are likely to be charged with unlawful insider trading. Prosecutors have strived for as much prison sentence for lawbreakers as possible. The need to maintain ones reputation and the thought of spending years in jail should discourage people from chasing for quick money through illegal means such as insider trading (Tao, Zhou, Lau Li, 2013, p.e4). Maybe then, tourists may get space under Brooklyn Bridge from Wall Street to Chinatown in New York. References List Akwera, G. (2010). The Wall Street Journal Guide to Information Graphics The Dos and Don'ts of Presenting Data, Facts, and Figures. Information Design Journal, 18(2), pp.178-179. Bar-Isaac, H., Caruana, G., and Cuat, V. (2012). Information Gathering Externalities for a Multi-Attribute Good. The Journal of Industrial Economics, 60(1), pp.162-185. Bull by the horns: fighting to save Main Street from Wall Street, and Wall Street from itself.(2013). Choice Reviews Online, 50(07), pp.50-3952-50-3952. Fuld, L. (1995). The new competitor intelligence. New York: J. Wiley. Granhag, P., Vrij, A. and Meissner, C. (2014). Information Gathering in Law Enforcement and Intelligence Settings: Advancing Theory and Practice. Applied Cognitive Psychology, 28(6), pp.815-816. Rajaratnam, B., Rajaratnam, K. and Rajaratnam, M. (2016). A Theoretical Model for the Term Structure of Corporate Credit based on Competitive Advantage. European Financial Management, 23(2), pp.183-210. Rajaratnam, M., Rajaratnam, B. and Rajaratnam, K. (2012). Mauling Mr. Market: Valuing Equity Capital of Businesses by Long-Term Value-Investors. SSRN Electronic Journal. Tao, X., Zhou, X., Lau, C. and Li, Y. (2013). Personalised Information Gathering and Recommender Systems: Techniques and Trends. ICST Transactions on Scalable Information Systems, 13(1), p.e4.