Managing Ethical Risk: The Securities Industry and the Law

We examine the interplay of markets, ethics and law, and rising demand for ethical behavior in a market driven society coping with the promise and peril of rapid technological innovation. We analyze the market affecting role of our Common Law/Rule of Law System, its adaptability to social need and resultant legal and regulatory action promoting adherence to the spirit as well as the letter of the law. We provide examples of manager and firm harm from sanctions imposed despite adherence to “the rules.” Finally, we discuss competitive market/common law interplay in the coming era of the genome