Case motivation Ethics in Finance

LEARNING OBJECTIVES
 What is ethical behaviour in the context of financial activity
 How we define ethical behaviour
 The implications of ethical misbehaviour
 The meaning of trust and integrity and their importance in the
financial markets
 Review specific case studies to identify the specific breaches of
ethics

CASE SYNOPSIS
The Bruner case “Ethics in Finance” discusses the importance of ethics
in finance and why it is important, It also reminds us of the importance of
agency risk and discusses the moral research underlying this dilemma.
Finally, it talks about actions we can take to promote ethical behaviour in
our business activities.
We then apply this to the Hayne Royal Commission into Banking and
Finance using specific examples to identify unethical behaviour.
It is important to note that significant judgement is required in ethics.
There is no one “right” answer.

OUR DISCUSSION
 Please note that our case discussion will extend beyond
what is covered in the case.
 We will talk about the theory in the Bruner case and
briefly review the WorldCom minicase and Royal
Commission
 Most of our discussion will focus on other examples of
ethical dilemmas and some of the ethical issues that
arise out of our current Covid-19 crisis.
 Please read the article “The Pandemic is an ethical
challenge” which is loaded on Moodle. This will lead our
discussion on the pandemic.

POTENTIAL QUESTIONS TO BE ADDRESSED IN REPORT SUBMISSIONS
1. How might a framework of
– reputation based on past performance, and
– commitment and trust relationships
allow for a more ethical dimension to your professional
behaviour?
2. Can ethics really be about the firm doing “good” (over
and above doing good for its shareholders)?
3. Evaluate the reasons proposed by Bruner [the author of
the case] about why we should care about ethics.

POTENTIAL QUESTIONS TO BE ADDRESSED IN REPORT SUBMISSIONS
4. Full copies of the case study articles discussed in the
Royal Commission technical content can be found on
Moodle. For two of these cases:
– Identify and discuss the key ethical issues that arise
– Assess the behaviours against the CFA Code of
Conduct in Exhibit 3 of the Bruner case and identify
anything that is a breach of the CFA Code of Conduct.

 You may discuss in groups but document and submit individually:
o Penalties will apply if we spot collusion
 You must:
o Document the assumptions you have made (if any) that are not in the case
o Show calculations and results as an appendix (not always required)
o Depending on your formatting, about 2-3 pages and not more than 3 pages
in 1.5 spacing, 12 point font.

Key points facts and problems:
1. What are the problems and the key issues that arise
2. Address the given discussion points or questions
3. Conclusions and recommendations if any
Do Not use a Q and A answer format: make this a business type briefing
And avoid simply restating what is already in the case

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