Ethical behavior in the financial industry

Summary

We will focus on ethical dilemmas facing professionals in the financial industry. Cases based on real events will illustrate various kinds of transgressions. We will study what regulators and firms have put in place to mitigate these issues and propose some guiding principles for individuals.

Content

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Keywords

financial fraud - financial crime- insider trading - tax evasion - market manipulation - market abuse - accounting fraud - money laundering - Maddoff - hedge funds - investment banking - cryptocurrency - hedge funds - private equity - embezzlement - ponzi scheme - pyramid scheme - tax havens - panama papers - cyber crime

 

Learning Prerequisites

Important concepts to start the course

Basic understanding of interest rates, equities and derivatives markets.

Basic understanding of macrofinance.

Learning Outcomes

By the end of the course, the student must be able to:

• Justify why laws are insufficient in curbing most questionable behaviours
• Differentiate the main ethical transgressions
• Infer why this industry is prone to a large number of scandals
• Elaborate on a few recent real case studies illustrating these transgressions
• Interpret what regulators and organisations have put in place to prevent financial crimes
• Assess / Evaluate what in the culture of an organisation can lead to moral failures
• Produce a detailed analysis of at least one real case study
• Propose a set of rules that could have prevented the problem from happening
• Design a compliance framework for a specific type of activity that can minimise financial crime

Transversal skills

• Access and evaluate appropriate sources of information.
• Make an oral presentation.
• Demonstrate the capacity for critical thinking

Teaching methods

Lectures

Projects

Exercises

Expected student activities

Attendance at lectures

Work on a project

Oral presentation

Assessment methods

Exam: 50%

Project and presentation of the project: 50%

 

Resources

Virtual desktop infrastructure (VDI)

No

Bibliography

"No one would listen" by Harry Markopolos

"Black Edge" by Sheelah Kolhatkar

"The Big Short" by Michael Lewis

"Debt: The first 5000 years" by David Graeber.

"The Panama Papers" by F. Obermaier, B. Obermayer

"Groundwork of the Metaphysic of Morals" by Immanuel Kant

"Ethics" by Baruch Spinoza

Ressources en bibliothèque

• Black Edge / Kolkhatkar
• Ethics / Spinoza
• Groundwork of the Metaphysic of Morals / Kant
• Debt / Graeber
• The Big Short / Michael Lewis
• The Panama Papers / Obermaier
• No one would listen / Markopolos

Moodle Link

• https://go.epfl.ch/FIN-419