Conflict on Trading Floor

Conflict on trading floor

The conflict situation in the case takes place in First America Bank. Poseidon cruise lines wants to finance the constructions of a new cruise ship which will be built in France. Poseidon reached out to Linda who is one of the top sales person in the non-dollar derivative desk of First America to help with the hedging strategy of French Francs. The main ethical dilemma in the case relates to misrepresentation of facts to the client by Linda and her team.

The author is a new employee in the bank and was recruited by Linda. For this particular deal the author feels that Linda has exaggerated the need for secrecy to the client. Also she has taken advantage of this situation to quote a higher than normal interest rate (price) and lie about the net profits made by First America. This situation has led to the various issues and dilemmas discussed in the case by the author.

Causes

There are several reason why this situation would have happened. First there seems to be no firm wide ethical guidelines or framework or culture. It looks like the most important measure that leaders in the firm pay attention to is the amount of net profit made for the firm. Also the criteria for bonus and rewards looks to be built around the amount of profit made. There looks to be less focus on the methods that is used to make that profit. This laser type focus on revenues could have led to various unethical practices creeping up in the firm.

Another factor that could have led to this situation would be the fact that Linda is under a lot of pressure to work harder than men to prove herself in the firm. She look to be very focused and competitive, and wants to prove that she is at par or better salesperson that everyone else. Also there will be lot of pressure on Linda to continue as the top salesperson for the company. All these factors could have made Linda to cheat