Res/351 Business Research Ethics

627 Words3 Pages
Business Research Ethics RES/351 May 28, 2012 Negussie Nega, M.A., DM What unethical research behavior was involved? In 2002 Citigroup Inc. was part of a lawsuit where analyst released biased information concerning stocks to the investors causing many individuals to lose money. The memo stated the analyst was reluctant to release the information because they fear a backlash from the investment bankers. The unethical behavior in the article was that several securities firm violated a basic ethics code when the research department doctored number that misleads the investors. The investors purchased stock based on tainted research. The accurate information was overlooked to avoid backlash from the investment bankers. In return for the involvement…show more content…
When corruption occurs it damages the reputation of the employees and the business. Society relied upon this firm to assist in making them money but the firm was more concerned with their bottom line. Many of the individuals doing business with these firms lost their life savings and destroyed some of the trust that investors have with the Wall Street firms. It makes people have second thoughts about investing in the stock market. Another effect this unethical behavior had on these organizations been they agreed to pay a penalty of over $1.43 billion dollars as compensation to the victims. Citigroup was fined over $400 million dollars for their part in this scheme. One of the conditions of the settlement was for Citigroup to separate the investing department from the research department; this way there would be no undue influence on the researchers to show a positive profit margin where there is none. There was also a ban on the allocations of Initial Public Offerings (IPO) to executives and directors of public companies. As part of the settlement none of the executives will face

More about Res/351 Business Research Ethics

Open Document