Henderson Maxwell Case Study 2022

Bad advice: Henderson Maxwell 1
BAD ADVICE: HENDERSON MAXWELL
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Bad advice: Henderson Maxwell 2
Bad advice: Henderson Maxwell
Ethics
Ethics is one of the most instrumental aspects of human life because it grants us the right
direction and guides in various aspects of life. Ethical conduct informs on the behaviors of
people working or interacting in various environments. The ethical conducts are thus the
behaviors that are deemed appropriate in a given institution or society (Eluka, Agu, and Nwonu
2015). In the field of financial management, the topic of ethics and ethical conduct is one of the
most important ones because they dictate the behavior and also decisions made by financial
managers. Therefore, ethical conduct in the field of financial management refers to the
acceptable behaviors that are supposed to be exhibited by financial personnel and those that are
supposed to inform on their behaviors in different circumstances (Kolb 2018). Like the other
forms of ethics, financial ethics is a subset of the general life ethics that dictate and guide the
behavior of the people. It is thus important to understand the concept of ethics in the financial
sector to understand the decisions that are made and the consequences that each decision may
bear.
Like the other industries of the world, the financial sector has several ethical principles
that inform on their ethical conduct. Some of these principles include care and respect for others,
diligence, fairness, and honesty. Thus, in the financial sphere, the ethical conduct abides by the
mentioned principles and plays an instrumental role in striking a balance of self-interest between
different stakeholders (Chaubey, Dev, and Patra 2016). Ethical conduct balance individuals'
interests by imposing direct and indirect consequences of the decisions and the behaviors that are
exhibited towards other people. Even though laws and regulations may appear to be the same as

Bad advice: Henderson Maxwell 3
ethical conduct, they exhibit other differences. Laws and regulations are usually based on laws
that are documented and applied in various jurisdictions. Unlike laws and regulations, ethical
conduct is purely based on the wrongs and the rights of human beings (Surbhi 2020).
Summary of the case
The case involves two major players Ms. McKenna and Henderson Maxwell; Henderson
Maxwell was a financial advisor and also the CEO of Henderson Maxwell at the time. Ms.
McKenna was a client who was seeking professional advice from a professional such as
Henderson Maxwell. After the service was rendered and Ms. McKenna received financial advice
from the professional, she sued him for bad advice, among other charges. In his advice,
Henderson Maxwell failed to inform the customer of some of the consequences, such as losing
nearly $500000 if she implemented the advice that was rendered to her (Hayne 2018). The
advice was not exhaustive and appeared to have been granted without any significant research on
her situation. After interacting with the client, Henderson Maxwell, through his employee,
impersonated the client and collected lots of financial information regarding her superannuation
accounts. The main focus of Henderson Maxwell was to influence the customer to invest in his
company, Henderson Maxwell, which was also operating in the main market. Despite failing to
render the right information to the client and also using dubious and illegal ways to get the
client's information, Maxwell still went ahead to charge for his services.
Therefore, in the case that unfolded, a professional financial advisor (Henderson
Maxwell) decided to be unethical in his practice and gave advice that was not based on any
professionalism. The client (Ms. McKenna), who sought the services of the professional, was
disappointed and was also at high risk of making huge financial losses should she have decided