What would you do? Your weekly ethical dilemma challenge

Thursday 16 May, 2019
by John Jeffery
You are trading on behalf of a client in fairly large nominals of US bonds. The counterparties in these trades are often people just like you. There’s a commission associated with a client’s trade and there’s also the opportunity, when it arises, to make some extra money from imperfections in the market.

You are trading on behalf of a client in fairly large nominals of US bonds. The counterparties in these trades are often people just like you. There’s a commission associated with a client’s trade and there’s also the opportunity, when it arises, to make some extra money from imperfections in the market.

On this particular day you are looking for an opportunity to buy some bonds for a client. The way you have decided to do this is by selling some of their short dated position and buying a slightly longer dated maturity. The deal is quite complicated, but you are confident in your maths and having checked the numbers for the 10th time you decide to go approach a few other traders. As the deal will be OTC (over-the-counter) it is not through an exchange, rather it is directly with another trader and prices are provided by the trader based upon their own calculations. You approach a competitor firm’s sales team (as they often deal with these type of bonds) and, keeping your cards close to your chest, you ask for some prices. The price given seems exceptional and you ask the broker to check. He comes back – nope, its definitely right.

You decide to execute. Its in the client’s best interest and you secure a superb deal. You check your maths again, the numbers being quoted seem to be quite wrong and you have no doubt that the trader on the other side has made a mistake. You have an opportunity to trade again, this time on your account for your own profit.

What would you do? What ethical considerations would you give to your decision-making? Why? Why not?

We encourage you to post your answers in the comments so we can create a healthy discussion, with the aim of learning from our peers, becoming aware of differing perspectives and challenging our own biases.

If you would like to submit an ethical dilemma to feature in an upcoming weekly challenge please email: dilemma@thebfo.org.

Photo by Josh Wilburne on Unsplash











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The Oath

  • Trust is the foundation of my profession.
  • I will serve all interests in good faith.
  • I will compete with honour.
  • I will pursue my ends with ethical restraint.
  • I will help create a sustainable future.
  • I will help create a more just society.
  • I will speak out against wrongdoing and support others who do the same.
  • I will accept responsibility for my actions.

In these and all other matters;
My word is my bond.

The Vision

A banking and finance industry that meets the community’s needs and has its full confidence thereby fulfilling its integral role in society.