Current Ethical Issues Essay

1418 words - 6 pages

IntroductionCorporate ethics are important to all businesses, especially where financial reporting and stock trading are involved. Insider trading, or "the trading of a corporation's stock or other securities by corporate insiders," is an illegal practice that is becoming a concern as corporate mergers and acquisitions become more commonplace ("Insider Trading," 2006). Following is a summary of an article involving the ethical issue of insider trading, a discussion of the ethical theories involved, details of the issue, and a plan for revision and communication of ethics.Summary of IssueThe issue addressed in the article by Gretchen Morgensen is insider trading. This practice allows those ...view middle of the document...

For example, an attempted application of the two duties of "thou shall not lie" and "think of the good of others before yourself" in a situation where, in order to act for the good of others, lying is necessary (like when secrecy is needed to protect information) is going to result in obvious contradictions between duties. In such a case, one duty must be sacrificed for another, which entails a rejection of the notion that duties are absolute. Rejecting duties as absolute is just one step away from destroying the moral code altogether, since an individual might very well decide to only fulfill a duty when it is convenient to do so.After the corruption of the Enron scandal which serves as excellent examples of the failure of duty-based reasoning in this respect. It is hopeful that the S.E.C. is watching the insider traders , more than the appearance of this article provesDetails of the IssueBasis of IssueThe core issue is the ethical dilemma involved with insider trading. The initial question is whether anyone is harmed by this behavior and if so, how to punish those who are taking advantage of the information available to them. The ethical problem involved in this particular situation involves the greed and dishonesty used to make a personal profit at the expense of others.Cause of IssueAnonymity appears to be a major cause of insider trading. The victims are faceless and the culprits are somewhat difficult to identify. At some point, personal greed causes an ethical deficiency. In turn, personal gain becomes more important than safeguarding the well-being of shareholders. It is unclear if there is a measurable decline in ethics, or just the awareness of an existing lack of ethics. In either case, insider trading seems to be brought about by an internal ethical conflict between self-preservation/personal gain and doing what is right for the entire group.Leadership's RoleCompany leaders are the primary culprits in insider trading as they are the select few who have access to confidential information prior to it becoming public. The research conducted by Measure markets indicates that insider trading took place on days when key deals were being struck in acquisitions. Only company leadership of both organizations involved and select third parties are aware of this information at this time (Morgensen, 2006). On a larger scale, leadership's role is to set the ethical tone within the organization. By conducting themselves in such a negative manner, there is a message sent to others within and outside the organization that ethical behavior is neither important nor required at this particular company. This is a dangerous model for company employees and consultants as it creates a slippery slope and leads to further unethical behavior.Ethical Revision and Communication PlanEthical StandardsThe current ethical standards (laws) are sufficient. The proposed plan would focus investigations and punishment on corporations and portfolio management firms that...

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