INSUBCONTINENT EXCLUSIVE:
The stock market scam of 1992 is considered one of the worst violations of ethics in the Indian financial industry
Retail investors lost money after the market was manipulated, and it subsequently lost 72 percent of its value
Despite serious consequences and convictions, a similar fraud in which bank and promoter funds were used to manipulate stock prices took
At a global level, the financial crisis of 2008 pushed the boundaries of unethical practices with housing loans given to subprime investors
Its effects continue to be felt across the world even after a decade
Economic activity has not yet returned to trend in most countries and public debt in advanced economies has risen by more than 30 percentage
Still, accounting frauds and market manipulations, Ponzi schemes, insider-trading, and other misdeeds continue to shatter investor
confidence.There are many reasons why ethical violations occur
Sometimes they become the norm because "everyone is doing it"
Others happen when individuals take advantage of loopholes in the system
Ultimately, violations are driven by the potential personal gain of the investment professional.Investors intrinsically trust financial
institutions with their money and expect them to invest it with integrity
All market risks considered, investors expect the highest return and put their faith in the hands of professionals
Upholding investor confidence is vital to the success of the investment industry
High ethical standards are critical to maintaining the public's trust in financial markets and in the investment profession.CFA
markets, duties to clients and employers, investment analysis and recommendations, and conflicts of interest and responsibilities
The Code of Ethics maintains that investment professionals must place the integrity of the profession and the interests of clients above
their own, and act with competence and respect
Since their creation in the 1960s, the Code and Standards have signposted the integrity of CFA Institute members and served as a model for
measuring the ethics of investment professionals globally, regardless of job function, or cultural context.Protecting investor interests and
strengthening their trust is paramount
Ethical conduct is vital to the ongoing viability of capital markets
Regulatory reform may go some way to combatting the misconduct in the industry but that alone is insufficient
Individuals and firms must develop a culture of integrity that permeates all levels of their operations
This will promote the principles of stewardship of investor assets, and work in the best interests of clients, above and beyond strict
A strong ethics-based culture that helps people engage in and promote ethical behaviour will foster trust, lead to robust global capital
markets, and ultimately benefit society.Professions can only exist within an industry when those acting with transparency, integrity,
candour, and trust reach a critical mass
CFA Institute has long championed these values
The organisation believes that the investment industry should work for the ultimate benefit of society, and that cannot be achieved without
the highest possible standards and ethics.CFA institute bears the responsibility of the accuracy and completeness of the above
article.Disclaimer: This is an advertorial and TheIndianSubcontinent is not responsible for the accuracy and completeness of the same.
