Ethic Case Study and Analysis

Longhui Li

Dr. Boughton

Introduction to Management Accounting

29 April 2016

Ethic Case Study and Analysis

According to a "whistle blowers" to submit the relevant documents, Citigroup due to the sale of housing loans to Fannie Mae and Freddie Mac and in violation of the relevant laws and regulations.

Citigroup admitted breaking the Federal Housing Author (FHA), and paid a fine. According to published a complaint file and Citigroup a named Sherry Hunt quality assurance personnel said in the document, Citigroup sold there "inappropriate assessment and a paperwork error" mortgage loans, or for the mortgage insurance and not according to the requirements as to the duty of disclosure, the bank exists deception, fabricating false information or misleading conduct agency of the federal government. It is reported that Hunter in August last year to the federal court of Manhattan filed a legal document, saying that Citigroup violated the "Claims Act False".

In the online search for Citibank news, scandal and illegal behavior is nothing new. In fact, more than Citi, all of the big consortium in the process of running will make different mistakes, which is no lack of illegal behavior. People don't expect them to be self disciplined. Because for the capitalists to maximize the interests is the only truth. Only the legal justice and to ensure strict censorship of the capitalists are not out of control. As an international student, I pay tribute to such a system. In addition to textbooks, I understand the American constitutional spirit and the capital market through movies. Several days before I watched "Spotlight", although it was not a commercial film reaction. But the story for me to understand this case is very helpful. To explore the protagonist in a corrupt system, try to reveal to the public the dark side. The stakeholders of the blocking shows sinister. However, even in an industry full of unfair behavior A good system still offers a chance to correct. The perfect judicial system, transparent and independent media that these errors can be exposed and sanctions. In contrast, my country has done much worth than the States, those kinds of things are common and accepted in China. Even if there are clear rules in china. But people don't take it seriously. Financial institutions, government agencies, the media between the interests of the exchange, mutual tolerance. The truth behind them is that they belong to a party. The flaw of the political system determines that the accountability system can not be implemented in China, because the benefit of the last unfair phenomenon is always the same group of people. The Department of justice of nature will not react -- they also from the party

Back to this case, the report in the performance of Citibank in order to sell non-performing loans, which is irresponsible for investors, although profitable in a short time. But in the long run it will mess up the whole market. Sales Department only concerned about the performance, do not care about the quality of the transaction is the cause of the matter. It is not realistic to maintain order by virtue of the ethics and professional ethics of the salesmen. Moreover, their manager will allow even to encourage them to do so. Anyway, the ultimate victims are investors, in the bubble burst at the moment they have earned enough. How to solve this problem, I think it should strengthen the supervision and punishment of the sales staff. Once a similar situation is found to cancel the qualification. The administrative organ shall set up special posts for financial institutions, and shall be responsible for checking whether all the laws and regulations are in conformity with the laws and regulations. Commercial institutions are also under the control of the judicial system. Of course, the premise is to ensure that the clean government staff in the actual operation. The capital market is great, it will force everyone's desire to transform the social development. The United States has proved the rationality of this society. But it also needs rules and regulations to ensure that everyone can gain from it. To ensure that no one is cheating. This system can not rely on everyone's consciousness, but the balance between the different groups. Politically so, so in the market.