An Ethical Dilemma – Questions/Exercises
1. What is/are John’s ethical issues?
I do not know the exact definition of ethical but I believe it to be related to our behavior and the decisions we make and if they are considered right or wrong by society. I am sure there are times when a situation may be perfectly legal but we may not think it is okay. Keeping this in mind, John’s ethical issues include thoroughly researching IPOs and using this information to his advantage, pocketing profits from the shorting process, disregarding the non-compete clause and allowing mailings to be sent to his clients prior to resigning, indirectly letting his clients know he was personally paying for their expenses instead of charging them to the firm, buying and selling stocks without the client’s knowledge, and not giving the time and attention needed to properly train new hires.
2. Are there any legal considerations for John?
I think he could be held legally liable for all of the actions mentioned above if they are illegal. I am not sure if indirectly letting clients know he paid for their expenses and buying and selling their stocks without their knowledge is illegal. Obviously he is doing something illegal if the SEC is investigating. I guess he could be fined and/or be taken to trial depending on the severity of his actions and the amount of money involved.
3. Discuss the implications of each decision John has made and will make.
I am not a risk taker and I know I would question his character based on the decisions he has made and I would not trust him. However, it sounds as if this type of behavior may be the norm with stock brokers who are willing to take risks. The Sharks would probably be more accepting of his behavior because they are risk takers but the Cessna and Turtles would be less accepting because of being more conservative. I think John should cooperate with the SEC with the hopes of reducing the severity of...