Ethics in Finance

Case study : Ethics and financial services Abstract A fictional case of a financial investment firm, based in offshore locations for the most part. It presents the structure and practices of the firm, with some expansion of these using anecdotes from the recent past. A range of ethical questions are introduced, relating to financial regulation, and employment practices. Readers are invited to take the perspective of an external consultant in evaluating and trying to change the ethical position of the firm. Key terms: Financial ethics, whistleblowing, ethics and HR practices, money laundering, ethics of share options

Stelling Minnis In 1947 Alexander Stelling started a stockbroking business in the City of London. Over the following twenty-five years he built this up into a well-established and well-respected firm, with a strong client list. In 1972 he entered into a joint venture with two American entrepreneurs, setting up a small commercial bank. This encountered serious difficulties and was wound up in 1974, and eventually as a result Stellings was taken over by the Minnis Group, stockbrokers operating originally in London and New York, but more latterly based in offshore locations such as Jersey, Cayman and the Isle of Man. Alec Stelling carried on for another four years as a director before retiring. Minnis continued to hold the Stelling operation at arms length until 1980, when it merged the two businesses, and moved its main office to Jersey. In 1992 the Minnis Group itself was broken up. The old Stelling arm of the Group was divested and taken over as a management buy-out by a group of established employees. The company was re-named Stelling Minnis as a means of keeping a link with the history of the firm, and as a way of holding on to the established customer base. Stelling Minnis has continued since then as a limited company, majority owned and run by eight of the original nine managers who

took over the firm in 1992 (and who slightly misleadingly...