Examples of Integrity in Financial Services and Sports
Explore real-world examples showcasing the importance of integrity in financial services and sports. From ethical behavior principles to consequences of questionable actions, delve into cases like the Libor scandal impact on ethics, bribery in sports, and FIFA corruption scandals. Learn about the significance of upholding integrity to maintain trust and fairness in these sectors.
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Presentation Transcript
Fundamentals of Financial Services Integrity Examples Ethics & Integrity in Financial Services
Learning Objectives Everyone MUST Be able to list and explain the key principles of ethical behaviour in financial services Know the importance of behaving with integrity. Everyone MUST Most SHOULD Be able to explain the key principles with the use of an example Most SHOULD Be able to give examples of where the integrity of people and/or organisations has been questionable. Stretch & Challenge Question: What has been the key consequence of the Libor scandal upon the way ethics is viewed in the financial services sector?
Activity In your table groups, you will be given a number of case studies. Each case study explains recent news scandals and the consequences. Make a note of the issue and the corresponding action taken in each scenario. * Be prepared to feedback to the class.
Examples of Integrity in Sport *
Olympics 2016: French eventing team banned from Rio for doping France have been banned from entering an eventing team at the 2016 Olympics in Rio after a horse belonging to one of its riders, Maxime Livio, tested positive for a banned sedative at last year s World Equestrian games in Normandy, France. The International Federation for Equestrian Sports has banned Livio as well as the whole French Team.
Former Bolton guilty of conspiracy to commit bribery Delroy Facey, who played for Bolton from 2002-2004, jailed for 2 years for conspiring to bribe other players. He was arrested as part of an investigation into match fixing. The judge told Facey "It's about the fans of the teams involved, the families who follow the fortunes of their teams with passion, loyalty and devotion. You have betrayed all that trust, all that confidence and it's like a cancer at the heart of football."
FIFA Scandals Seven senior FIFA officials were arrested in Switzerland accused of bribery, racketeering and money-laundering involving tens of millions of dollars. The aim of the bribes was to influence the outcome of bids to stage tournaments such as the 2010 World Cup in South Africa and the 2016 Copa America in the US, prosecutors say. The Swiss Attorney General's office has separately announced investigation into the allocation of the 2018 and 2022 bids. Source: BBC Sport, June 2015 Labour MP Chris Bryant, the UK shadow secretary of state for culture, said: "Sepp Blatter's antics remind me not so much of the hokey-cokey as Glenn Close in Fatal Attraction.
Examples of Integrity in the Media and Entertainment *
JK Rowlings pseudonym leaked by law firm JK Rowling was left feeling very angry when her pseudonym Robert Galbraith (under which she wrote The Cuckoo s Calling) was leaked by law firm Russells. One of the firms partners, Chris Gossage, had told his wife s best friend, Judith Callegari, that Robert Galbraith was really Rowling. Callegari then leaked the story to the press. Rowling stated A tiny number of people knew my pseudonym and it has not been pleasant to wonder for days how a woman whom I had never heard of prior to Sunday night could have found out something that many of my oldest friends did not know
Examples of Integrity in Financial Services *
Deutsche Bank in record $2.5bn fine over interest rate manipulation Deutsche Bank fined a record $2.1bn by US regulators and 227m by the FCA for manipulation of Libor and Euribor inter-bank rates between 2005 and 2009. Deutsche tried to mislead regulators and could have hampered investigators. One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn't limited to a few individuals but, on certain desks, it appeared deeply ingrained. Georgina Philippou, FCA Source: BBC, April 2015
Six banks fined $5.6bn over FOREX rigging Barclays, Royal Bank of Scotland, JPMorgan, UBS, Bank of America and Citigroup hit with huge currency manipulation penalties by UK and US authorities 2008-2012; traders used chat rooms to manipulate prices in their favour. The fines break numerous records Guilty pleas by the banks are highly significant, as banks have previously settled investigations without an admission of guilt. If you ain t cheating, you ain ttrying Barclays Trader in chat room message Source: Daily Telegraph, May 2015
Examples of Integrity in Business *
NHS director sacked after revelation he is a convicted armed robber Craig Alexander was jailed after holding up a Tesco Express store at gunpoint in 2001 before fleeing with almost 1,250. He lied about his 3 year stint in prison and was hired for a senior post at NHS Brent, where he was in charge of multi- million pound taxpayer-funded budgets His past was revealed after a member of staff who had complained about his rudeness looked him up online. In his role, Alexander was responsible for managing millions of pounds of taxpayer-funded budgets for the Quality, Innovation, Productivity and Prevention programme for 17 months. Questions are now being asked about why the NHS failed to carry out simple security checks.
GlaxoSmithKline fined $3bn after bribing doctors GSK was fined $3bn ( 1.9bn) in 2012 after admitted to bribing doctors and encouraging the prescription of unsuitable antidepressants to children. The company encouraged sales reps in the US to mis-sell drugs to doctors and lavished hospitality on those who agreed to write extra prescriptions, including trips to resorts in Bermuda, Jamaica and California. Psychiatrists and their partners were flown to five-star hotels on all-expenses-paid trips. They could enjoy diving, golf, fishing and other activities. Sales reps in the US encouraged to mis-sell antidepressants Paxil and Wellbutrin and asthma treatment Advair
Serious Fraud Office launches Tesco accounts investigation The SFO has launched a criminal investigation into allegations that Tesco overstated its profits by 263m. Tesco had stated that the overstatement of its profits had gone on for longer than previously thought, and in Dec 2014 the Financial Reporting Council announced an inquiry into Tesco s accounts for 2012, 2013 and 2014. The FRC investigation will include PwC s auditing and preparation of Tesco s accounts. The company s share price has fallen nearly 45% since the accounting scandal. Sources: FT, Oct 2014 and BBC News, Chairman Sir Richard Broadbent stepped down following the allegations, and a number of senior executives have been either suspended or have left the company. Dec 2014
Would you do business with these companies/individuals?
SUMMARY How important is integrity and ethics to the success of a business? Thinking point
