Case Study Analysis: Ethics in Finance, UBS and Bankers Trust

This assignment comprises two case study reports analyzing ethical breaches within the financial sector. The first case, "Loyalty, But to Whom?" examines the actions of Glen Grossmith at UBS Securities Canada Inc., who was penalized for assisting a colleague involved in potentially fraudulent activities related to stock trading. The second case, "Bankers Trust: Learning from Derivatives," investigates the fraudulent sales practices of Bankers Trust and the losses incurred by clients due to deceptive derivative products. The reports delve into the ethical dilemmas, the consequences of unethical behavior, and the impact of such actions on individuals, corporations, and the financial market. The cases highlight issues such as loyalty, financial fraud, and the risks associated with financial derivatives. The reports are based on the provided assignment brief to analyze and report on the cases.

Running head: CASE STUDY ON ETHICS
Case Study on Ethics
Name of the Student:
Name of the University:
Author Note:

1CASE STUDY ON ETHICS
Case Study 1: Loyalty, But to Whom? Pg. 322
The above mentioned case study is about an incident that has occurred in Canada. It
was examined that a person named Glen Grossmith, considered as a family man and a
dedicated athlete was one day asked for a favour from his boss, Zoltan Horcsok, concerning a
helping a business colleague named Mark Webb. The company he used to work in was
named as UBS Securities Canada Inc. In this respect, Glen agreed to favour the client without
putting a query of why the favour was needed. Further, it was examined that the support
required by Mark was searching 10,000 buyers for Phelps Dodge. Furthermore, without
analysing the purpose behind this request, Mr. Glen got in contact with a client in the context
of buying shares.
Furthermore, to the surprise of Mr. Glen, it was examined that Mr. Webb had been
opposing against a client who had complained about him to UBS in the U.S. Regulators in the
context of allegedly falsified the client to buy shares. In this connection, Mr. Glen was fired
from his working organisation. It was also found that Mr. Horcsok had destroyed the paper of
the trade tickets that Mr. Glen had contacted with the client he was asked to. Finally, the case
study concluded with examining that the two traders named as Mr. Horcsok and Mr. Webb
had been found guilty of falsifying information and false business trade and in turn, they had
to bear the results of the same. Both of them were suspended from the market of Canada, and
Mr. Horcsok lost his liability to act as a supervisor too. Besides, Mr. Grossmith without even
being a fault was penalised with a fine of $35,000 and was suspended from the Toronto Stock
Exchange for one month.
Case Study 2: Bankers Trust: Learning from Derivatives
The above mentioned case study is about a banking organisation named as Bankers
Trust (BT). The concerned bank was considered as one of the most substantial and revenue

2CASE STUDY ON ETHICS
generating bank across the globe in the era of 1990s. Further, it was examined that under the
leadership of its chairman, Mr. Charles Sanford, Jr., from a commercial bank to a creative
financial bank. Further, it was analysed that the bank gained revenue of approx. $1 billion in
the year of 1993. It was also examined that $400 million revenue generated by the bank was a
result of its derivatives business.
Furthermore, it was examined that the bank was found guilty of fraudulent practices
of sales in the year between 1994 and 1995. The clients of the bank complained about the
massive loss they had to face because of the fraud derivative products that were sold to them.
However, the bank stated that the clients were crying foul and they were not at fault. The
study also analysed that over more than six companies had to bear loss because of the false
derivatives sold by the concerned bank. Finally, the study investigated that the company P&G
which came into contact with the BT bank in the year of 1993, represented the case and
provided few recorded shreds of evidence against the bank which proved the bank guilty of
the fraudulence they had done with the clients.

3CASE STUDY ON ETHICS
Bibliography
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improving consumer satisfaction and delight matters. Journal of Business
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Babic-Hodovic, V., Arslanagic-Kalajdzic, M., & Jazic, A. (2018, October). TO WHOM ARE
YOU LOYAL, TO GLOBAL OR LOCAL BRANDS–EXPERIENCE BEFORE
LOYALTY. In 9th International Conference of the School of Economics and
Business (p. 59). University of Sarajevo, School of Economics and Business Trg
oslobodjenja–Alija Izetbegovic 1, Sarajevo, Bosnia and Herzegovina.
Guill, G. D. (2016). Bankers trust and the birth of modern risk management. Journal of
applied corporate finance, 28(1), 19-29.
Marthinsen, J. E. (2018). Risk takers: uses and abuses of financial derivatives. Walter de
Gruyter GmbH & Co KG.