Employers in financial services must have stringent codes of professional behavior for their employees to observe. Even given such a code, how should employees honor their fiduciary duty to safeguard the firm’s assets and treat clients equitably? What mechanisms would you suggest for keeping employees in banking, equities trading, and financial advising within the limits of the law and ethical behavior? How do you think this case might be treated today? Should employees in these industries be encouraged or even required to receive ethical certification from the state or from professional associations?
1. Employers in financial services can ensure that their employees honor their fiduciary duty to safeguard the firm’s assets and treat clients equitably by implementing and enforcing a strict code of conduct. The code should clearly outline the legal and ethical boundaries that must be respected by all employees. Regular training on ethical behavior and legal compliance can also help to ensure that employees are aware of these boundaries and the consequences of violating them (COUNCIL POST, 2021). Additionally, companies can establish an independent ethics committee or hotline that employees can use to report any violations of ethical or legal standards. The committee can investigate such reports and take appropriate action to address any violations.
2. If a similar case occurred today, it would likely receive even more media attention and scrutiny. With the rise of social media and the 24-hour news cycle, news spreads faster and wider than ever before. As a result, the reputational damage to the company and individuals involved could be even more severe. Furthermore, the penalties for insider trading have increased significantly since the 1980s, and the SEC and other regulatory bodies are much more vigilant in detecting and prosecuting such violations. It is likely that the penalties for similar violations today would be even more severe than they were in the 1980s.
3. Encouraging or requiring employees in these industries to receive ethical certification from the state or professional associations could be a useful mechanism to promote ethical behavior and legal compliance. Such certifications could provide employees with a clear understanding of what constitutes ethical behavior and the consequences of violating ethical standards. However, it is important to recognize that ethical certification alone is not sufficient to ensure ethical behavior. Companies must also implement and enforce a strict code of conduct, provide regular training on ethical behavior, and establish an independent ethics committee or hotline to investigate and address any violations of ethical or legal standards (Taygerly, 2022).
References
COUNCIL POST. (2021, October 21). 14 Ways Companies Can Promote Financial Wellness Among Employees. Retrieved from https://www.forbes.com/sites/forbesfinancecouncil/2021/10/21/14-ways-companies-can-promote-financial-wellness-among-employees/?sh=276ba7291166
Taygerly, T. (2022, September 14). How to Develop a Strong Work Ethic. Retrieved from https://hbr.org/2022/09/how-to-develop-a-strong-work-ethic