Tangled Webs Case Study

Tangled Webs Case Study

1. Write a summary of the case (approximately 100-150 words).

James Gansman was a lawyer and senior partner at Ernest & Young’s New York office. He was looking for an affair on AshleyMadison.com. He focused on the fine details of severance pays and compensation for executives at takeovers. Over time, Gansman came into contact with Donna Murdoch who he sent stock tips and hints to after they had become comfortable with each other and had moved to daily phone calls and messages.

Eventually the communication became more than just trading tips for personal favors. Murdoch shared tips with another man she met online who happened to become her supervisor and she shared tips with her father who was charged with securities fraud earlier on. Over time, the SEC caught wind of her trading activities and started an investigation on her which led to a full blown criminal investigation about her activities. She eventually; after many tries; decided to plead guilty for a lighter sentence and gave up all the information she could about Gansman.

Eventually Gansman was barred from the state of New York and was not allowed to practice law there anymore. He was sentenced to one year and one day in jail. By the SEC case, Gansman settled on a $250,000 case, Murdoch was charged $404,054 which was waived due to inability to pay and her father was charged with $265,924. Murdoch has not been sentenced on the criminal case yet.

2. Identify (lists) the ethical issues that have arisen in this case. (about 100 words)

* Extramarital affairs: Seeking avenues apart from marriages for excitement. Not necessarily a business ethics issue.

* Gansman inside information about mergers and acquisitions: Being part of M&A teams, he had access to private and confidential information which he should have keep discreet.

* Gansman violating the compliance policy: He discussed non-public information with an outsider although he had signed...