Conflict on a Trading Floor Essay

741 Words Jun 7th, 2012 3 Pages
CONFLICT ON A TRADING FLOOR (A)

CASE SUMMARY

Brief background and context:

Junior salesperson ("Seth"), an assistant on the non-dollar derivative desk of FirstAmerica (“FA”), finds himself in a difficult situation and has to decide what course of action to take as relates to going along with misrepresenting material facts to a key client, Poseidon, in conjunction with their hedging of French Franks relating to the $700 million equivalent cost of the five year construction of a new cruise ship.

Seth is a relatively new employee at FA and was recruited by one of his key managers, a salesperson named Linda. Linda is asking Seth to “play along” with her questionable sales tactics so as to make the trading desk at FA a huge profit
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What is/are the main ethical issues?

(i) In the name of making short-term profits for the trading desk/FA and big bonuses for those involved (including Seth) and, therefore, taking the path of least resistance, how much risk should I run: a. Legal risk to FA and its employees (including me) b. Probability of being found out c. Reputation of FA d. My self respect and desire to live honorably and be honest

What happened in the case?

See above. Additionally would add that the case does provide four reasons to send the fax and four reasons to not send the fax.

(i) Send the fax a. Boss (Linda) told me to do it b. Seth indebted to Linda c. Make trading desk as much money as possible d. Just began my job and have lots of career potential (ii) Do not send the fax e. Be honest (also impacted by deeply felt religious conviction) f. Responsibility to Poseidon g. Negative impact to FA in the long-term h. Personal professional benefits by staying honest and safeguarding Poseidon’s interest

Note: The student would not know the outcome of the case where Seth did go ahead and send the Telerate page fax, the deal closed, big bonuses were paid, Linda moved to another bank, CFO of Poseidon found out, litigation between Poseidon and FA that was settled out of court, and Seth felt terrible (lost his self-respect).

How do you feel

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