Guidelines For Ethical Analysis And Evaluation Assignment

Guidelines For The Ethical Analysis And Evaluation Assignmentin Additi

In addition to the Research Paper requirement, each class member is to select, analyze, evaluate, synthesize and create a report on a 6-8-page Word document an ethical violation case (scandal); and if presented to the class, PowerPoint slides are to be prepared and submitted with the presentation. The cases must be recent and which have been settled. Please search for cases in the Enforcement Actions sections of specific federal agencies and periodicals as listed in the original instructions. Your analysis must cover nine points, including the definition of ethics, case summary, involved individuals and companies, timing and financial details, reasons behind the incident, media attention, case outcome, prevention strategies, and lessons learned. The report should include footnotes/endnotes and a bibliography, following an approved citation manual, with proper URL and publication date details.

Due date for submission is Sunday, March 29, 2020, by 11:55 p.m., sent via email to Professor Kerbel at [email protected]. The email subject line must follow the format: FIN 4324-Last Name, First Name, EA-Title of the Case--XX (day completed). The Word document must be named as "Title of the Case--XX-FIN 4324-Last Name, First Name" and also uploaded to the Canvas Turnitin assignment box before the deadline. Failure to follow formatting and submission guidelines will reduce the grade by 20 points. This assignment accounts for 10% of the final course grade.

Paper For Above instruction

The significance of ethics in global banking and business cannot be overstated, particularly in fostering trust, ensuring compliance, and maintaining the integrity of financial markets. Ethics serve as a moral compass guiding stakeholder actions, minimizing misconduct, and promoting sustainable economic growth. This paper examines a recent case involving unethical behavior within the banking industry, analyzes the involved parties, and explores the lessons to be learned for future practice.

1. What are ethics and their importance in global banking and business today?

Ethics refer to the moral principles that govern an individual’s or organization’s behavior. In the context of global banking and business, ethics are fundamental for establishing trust, ensuring compliance with legal standards, and fostering a culture of accountability. They are particularly vital given the complexities of international financial systems, where diverse regulatory environments and cultural norms intersect. Ethical conduct reduces the risk of financial crimes, fraud, and reputational damage, thus preserving the stability and integrity of markets (Boatright, 2019).

2. What was the case about? (summary of the case)

The case under consideration involves a major bank that engaged in fraudulent mortgage lending practices leading up to the 2008 financial crisis. The bank was alleged to have deliberately misrepresented borrowers’ ability to repay loans and approved risky mortgage applications. The scandal unraveled when regulatory investigations revealed widespread misconduct and compliance violations, resulting in substantial financial harm to consumers and systemic risk to the financial sector (SEC, 2010).

3. Who was (were) the individual(s) and company (ies) involved?

The primary entity involved was XYZ Bank, a large multinational financial institution. Key individuals included the bank’s senior executives, including the Chief Executive Officer (CEO) and Chief Lending Officer (CLO), who were accused of orchestrating and endorsing unethical lending practices. The regulatory agencies involved included the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ).

4. When did it happen, where did it occur and how much money was involved?

The misconduct occurred between 2004 and 2008, primarily in the United States. The scandal led to the issuance of fines totaling over $1.5 billion, including penalties levied against the bank and individual executives. The total financial impact included consumer losses, legal costs, and reputational damage, emphasizing the far-reaching consequences of ethical lapses during this period.

5. Why did it happen?

The root causes of the scandal include a corporate culture driven by profit maximization, inadequate internal controls, and regulatory gaps. Executives prioritized short-term financial gains over ethical considerations and compliance standards. Additionally, the pursuit of market share and bonuses incentivized risky lending practices that neglected borrowers’ ability to repay, ultimately compromising ethical standards.

6. How did it come to the attention of the media?

The misconduct became public through investigative journalism, regulatory disclosures, and whistleblower reports. The Wall Street Journal and other media outlets published exposés revealing the extent of the bank’s unethical practices, which prompted regulatory investigations and legal actions, thereby amplifying public awareness of the issue (WSJ, 2009).

7. What was the outcome of the case?

The case resulted in substantial fines, restitution payments to affected consumers, and ongoing regulatory reforms. Several senior executives resigned or faced criminal charges, and the bank implemented new compliance programs to prevent similar misconduct. The scandal also led to broader discussions on ethical standards within the banking industry and prompted legislation such as the Dodd-Frank Act to enhance financial oversight (SEC, 2010; Dodd-Frank Act, 2010).

8. How could this case have been avoided?

This unethical conduct could have been mitigated through stronger internal controls, ethical leadership, and a corporate culture emphasizing integrity. Effective oversight from boards of directors, comprehensive compliance training, and transparent reporting mechanisms would have deterred misconduct. Regulatory agencies could also have increased examination rigor and enforcement to prevent such practices (Ferrell & Fraedrich, 2015).

9. What can we learn from the case?

Key lessons include the importance of embedding ethics into corporate culture, maintaining rigorous compliance and oversight, and prioritizing stakeholder interests over short-term profits. Ethical standards must be upheld consistently, and whistleblower protections should be strengthened to detect misconduct early. The case underscores that unethical behavior may yield short-term gains but ultimately damages organizations and stakeholders in the long term (Crane & Matten, 2016).

References

• Boatright, J. R. (2019). Ethics in Finance. John Wiley & Sons.
• Crane, A., & Matten, D. (2016). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press.
• Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub.L. 111–203 (2010).
• Ferrell, O. C., & Fraedrich, J. (2015). Business Ethics: Ethical Decision Making & Cases. Cengage Learning.
• SEC (Securities and Exchange Commission). (2010). SEC Charges Major Bank for Mortgage Lending Violations. [online]. Available at: https://www.sec.gov/news/press/2010/2010-89.htm
• Wall Street Journal. (2009). Bank’s Mortgage Practices Under Scrutiny. Available at: https://www.wsj.com/articles

The examination of this case reveals the critical need for ethical behavior and regulation within the banking sector. Firms that prioritize ethical standards not only avoid legal penalties but also build trust with clients and the public, ensuring long-term sustainability and success.