Comparative Business Ethics & Social Responsibility

Added on - 23 Mar 2020

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Running head: COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY1Comparative business ethics & social ResponsibilityInstitutionStudentDate
COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY2Comparative business ethics & social ResponsibilityThe secret investigation and subsequent conviction of Rajaratnam and other people in the casestudy presented will prevent other financial managers and other investors from sharing nonpublicinformation or using such information for personal enrichment. The reasons for this stand areexplained in the following section of this report.It set a precedent for inside trading heavy penaltiesThe sentence that Mr. Rajaratnam of eleven years and the order to pay damages to all thoseaffected by the malpractice amounting to over US Dollars 158 million. Research has shown thatheavy penalties deter other potential criminals from engaging in the criminal acts (Larry, 2005).Many people who engage in inside trading love making faster money and in any case they try toavoid instances that can make them lose their money. Rajaratnam hired the best attorneys in theStates to avoid losing and if only he had an example like the one he set, he would have avoidedthe crime. He was even willing to collude with investigators and corrupt the Intel corrected onhim because he knew the penalty awaiting him if he is found guilty. Fear will prevent the otherpeople willing to participate in the crime and thus nonpublic information will not be disclosedfor personal gains. Heavy penalty set is a motivation enough of making financial managers andinvestors shy off from these activities (Brody & Ackerman, 2014).Involving Key Players in the InvestigationWhen the Securities Exchange Commission (SEC) decided to bring in people who werecolluding with Rajaratnam in insider trading, a warning was given to all the perpetrators thatbetrayal is possible. Mr. Khan accepted to collaborate with the government in ensuring the
COMPARATIVE BUSINESS ETHICS & SOCIAL RESPONSIBILITY3conviction of the said individual. He was even willing to testify against Rajaratnam with thehopes of facing a lower charge in his own conviction. It was the best move that made it possibleto more information to be corrected regarding the activities and the communication of theoffended. Text messenger and videotapes were corrected with the permission of Mr. Khan. Thewhole scenario will act as a warning to potential fraudsters that the authorities can use any meanspossible to acquire the evidence necessary to convict someone in a court of law (Gross, 2007).Secret investigation that includes key players in the crime will best stop the malpracticeConnecting investigations with wire transfers and offshore accountsDuring the investigation of Rajaratnam, the SEC used information of other suspects such as wiretransfers in offshore banks or incorporating their investments with shell companies and thesubsequent failure to report such gains while filing the tax returns. A good example is that of Mr.Anil Kumar who gained from insider trading and hid the money in offshore accounts. In additionto secretly investigating the accused phone conversations, following keenly on the investmentpatterns and how money acquired is utilized helps to raise red flags of insider trading. The act isimportant in proving beyond doubt that the suspect actually has got something to hide. Such amove and a way of the investigation will make potential criminals from committing the crime.They will be worried that the proceeds from their activities will be traced back and as a result,their activities will be exposed (Levine, 2014). Connecting the accounts and financial assets of asuspected person with the activities investigated will reveal facts that will eventually form part ofthe evidence. Such acts will always deter fraudsters from engaging in the activities.Investigating one`s network of friends and business partners
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