Nova Scotia Ethic Assignment

Being short means that the dissolutes sell more sh ars than are available in the new issue and the rim has some leaven power in the after-market, meaning more liquidity. Mr.. pluck was earning whiz one million million million million millions of dollars for the bank in 2004, it was seeking step forwardside legal opinions on the ramifications of renegotiating his contract to off hold back gainful him so much. Cumming is willing to testify that senior executives at Scotia had divulged the banks desire to arrest berry in something like a securities violation so Scotia could determination it against him, to either s foreverely reduce his payment package or throw in off him.The bank contracted that cull had hidden his behavior and that his education and training was such(prenominal) that e should turn over shaftn his misconduct br to each oneed fundamental terms of his drill with Scotia, and was unless cause for his termination. Colon (berrys lawyer) cited the passa ge in COMIC that forgives the dispersal of any previously uninsured securities from cosmos entered on the exchange. Williams responded by saying, The advice we stock from counsel-?. Scotia lawyer interrupted, preventing Williams from finishing her sentence, explaining that what she was about(predicate) to say was protected by solicitor-client privilege.But the particular that Williams, herself a lawyer, had sought a legal opinion on culls reads begged a crucial question if the promontory of accord didnt know whether or non what Berry was doing was improper, how could they expect him to at a lower placestand? An industry thats most entirely self-regulated, Berrys facial expression raises questions about how this monitoring is carried out. The history of Citibank and David Berry The Bank of Nova Scotia, commonly referred to as Citibank, welcomed its first customers in Halifax, Nova Scotia in 1832. Citibank remaind to expand its branches across Canada, into the U. S. ND o verseas from the 1 9th century and onwards. In 1 999, Citibanks Corporate Banking melodic line and Scotia superior Markets were integrated to form Scotia Capital. Citibank now serves to some 21 million customers in more than 55 countries across the world. One of the main factors for the offset and success of Citibank is that it fosters a committed team that lives their shared values and plant to let downher to provide customers with expert advice, insights and financial solutions . Citibank clearly puts great strain on hiring the best faecesdidates suitable for their cheats. One individual who stood out the most was David Berry.Berry first loped at Ernst & Young after finding out that the firm loud pay for his MBA tuition if he committed to work for them for a few years. He had left Ernst & Young after receiving his MBA and chartered control license to join Scotia Capital in 1995. Berry Was presented the opportunity to work at Citibank through his fathers friend, Gordon Chee seburger, who was the lead of Scotia Capital Markets at the beat. Berry started out as a research associate and had later moved to the sales and Trading department In the span of both years, he do his way up the ladder to eventu totallyy dominate Scotia Capitals preferable desk.Berry became a to commodity as other banks wanted him to leave Citibank and join them, which direct to Citibank offering Berry a direct-driven deal in which he unploughed a certain percentage of the profits he make for the bank. He was the only principal who received a direct-drive deal as all the other traders were compensated on an annual bonus. This direct-drive deal percentage was increase a few times as Citibank aimed to keep Berry at the bank. In 2003, it was stated that he had earned $15 million for himself , earning almost double of the chief executive officer of Citibank.Through his performance he developed any privileges, and his subordination of the industry made Berry extremely powerful . Shortly after his hook to success, he was dismissed from Citibank then known as Scotia Capital. What is the ethical reason here? The ethical gaucherie here was that Citibank had fired Berry for purportedly engaging In inappropriate profession practices, specifically, selling impertinently issued favored shares to clients without printing the trades biblically on the stock exchange. However, Berry claimed that it was perfectly fine to terminate from printing the trades on the stock exchange. **There were two issues involving Cecilia Williams that weve mixed up. . Cecilia Williams questioned him about the trade regarding balconied and Great West Life. She determined that he was scathe to do this and was going to forward the tapes to MRS.. But Berry had played the tapes to Scotia head of trading, Mark Evader, and he say that this was fine and that every trader (including him) did this. As Williams was getting ready to send the report to MRS., Berry was allowed to attach a n arrative to the report explaining his actions. He told Williams that he was going to state that Evader said that what he did was common practice.Williams reacted in shock and said What? Our dead trader does this? After this, there was no talk of the tapes going to RSI. This had zero to do with the preferred shares. 2. The second issue is in regards to the preferred shares and whether or not they should wear been printed on the stock exchange. RSI did their process trade audit of Scotia, and it was during this that they discovered the preferred shares issue. Celiac Williams wasnt sure if there practices were allowed, and Berry suggested getting opinion from another compliance expert Linda Frets who stated that he had done vigour wrong etc etc. His is the main issue, and the reason he to fired for not the Balconied and Great West Life trade. Http//www. Tortellini. Com/informer/random-situ if-informer/2008/06/01 / traders-revenge/4/ This had all started erstwhile Berry started to make millions for the firm and for himself, outpacing the earnings of top executives. Mr.. Berry had bought some shares in the Balconied mining company from a client and, in turn, sold the same client shares in Great West Life. Berry had not printed the trades on the exchange because the preferred shares were new issues (I. E. They were being offered to electric potential investors for the first time).Berry justified his actions because it was soundless in the firm that new issues were exempt from being printed on the exchanged. However, his actions were wrong in the eyes of Cecilia Williams, the head of Scotia Capitals compliance department. Williams had discussed to Berry that she was going to send the tape communication between Berry and his client to the Market Regulation Services. The market regulation service had started its routine scheduled trade desk review at Citibank. Berry went on to get another opinion from his own counsel from a compliance expert, Linda Frets.Fret s ad advised that because the new issue shares in question had been sold from Berrys caudex before being listed on an exchange, they did not constitute improper off-market minutes and thus were not in violation of Universal Market law Rules (EMIR). Even if they had been, Berry did not understand why Citibank hadnt alerted him to this issue languish before now. He had never been secretive about how he operated. And, as far as Berry was concerned, there was no harm to his clients by trading this way. A few weeks later, Berry was asked to meet with Scotia Capitals deputy chairman along with head Of institutional equities.Berry was notified that he was being suspended for the time being because Citibank was undergoing its own investigation relating to the preferred shares issue. Mr.. Berry filed a SSL 00 million claim focusing on constructive and wrongful firing. In return, Citibank filed a counterclaim along with a statement of defence mechanism. ethical Issue in the Case and et hical behavior practices transgressed One of the issues raised in the case is professionalism. The Commission found a violation and failure of the firms upper instruction to act in public interest in favor of their own. Mr..Berry was allowed to take hold trades which were entered on the liquidity of the preferred stocks. These trades made bullion for Scotia, and the more money he made for the bank the more chapiter he was allocated and the big the enumeration he could carry and the more money he made as compensation. Even though this is not illegal, integrity of the capital markets was jeopardise by these actions. Also, the lack of care from the solicitude has led to a conflict of interest. Their actions could have had serious and lasting effects on the integrity of capital markets and public trust resulting from a lack of supervision in Scotia Capital.What is the Ethical Issue? The main issue in this case was whether printing the trades of the newly issued preferred share s on the stock exchange constituted u give noticehical trading practices. Furthermore, if the practices were not deemed a violation of JIM by compliance expert Frets (and uncertain by Scotia own Cecilia Williams), did Citibank act ethically in still move their own investigation and terminating his contract? An identification of the key people come to, and their positions in the company Below is a list of the key people involved 1 Cecilia Williams (head of Scotia Capitals compliance department) 2.Linda Frets (External compliance expert) . Jim Mountain (Mr.. Berrys boss at Scotia Capital Brian Porter, Scotia Capitals deputy chairman 4. 5. squirm Hugh (Citibank CEO) 6. Marc Mannequin (Berrys assistant) David Wilson (then vice-chairman of the Bank of Nova Scotia, and chairman 7. And CEO of Scotia Capital) 8. Andrew Cumming, who, until 2002, was Berrys direct supervisor. Cumming swore an affidavit in support of Berrys lawsuit, claiming that he saw nothing wrong with how Berry was tic keting new issue shares. 9.Mark Evader, Scotia head of trading mickle who have suffered David Berry David suffered as he had been out of a job for a long time, and thus has offered financially and occupationally. Although he had received umteen job offers, they were all contingent on the outcome of the case. His reputation has been dishonored as this stigma will always stick to him. Furthermore, his absence from the industry for a significant period of time may have dishonored his efficiency as a trader as he would have lost many clients and relationships, as well as the power he previously possessed.If he were to return to the industry, it would be near impossible to continue where he left off. In addition, David has further suffered financially as he has had to spend money n funding his case against Scotia. Citibank It is reported that the preferred desk has suffered without him since he was dismissed. Scotia has also had to spend a lot of money in the case against Berry. Davi d Berrys Clients David Beers clients have most likely suffered as well. If Berry, using his expertness was generating millions in income for himself, its clear that his clients were earning great profits on their investments as well.Although his clients can find another advisor, it is not likely that they will find one with the expertise and skill of David Berry David Berrys Family His family has also suffered because he has not worked ever since the termination from Citibank. This must have cost the family as their standard of documentation mustve lowered with the great loss in income. They were living very ample lifestyles with Berrys income. List of ethical behavior practices that were transgressed 1. Professionalism a. Knowledge of the law d. Misconduct 2. lawfulness of Capital Markets a.Material Nonpublic Information (not completely sure) 4. Duties to the Employers B. Additional Compensation Arrangements (Dont know if this fits) C. Responsibility of the Supervisor Descriptio n of Events, Penalties or Convictions that followed David Berry was terminated in June, 2005 from Citibank. He was alleged of committing security regulatory violations. He was accused of violating equal market integrity rules. Berry went into a big legal fight to prove that he did not do anything wrong. Information was released to the media that higher concern of Citibank were looking for opinions from alai. O,errs to change Berrys contract and keep him from leaving for a rivalry prior to his accusation and termination from Scotia Capital. Eight years, later all allegations against Berry were dismissed by the IIRC. David Berry has a $100 million score action law suit against his former employer for constructive and wrongful dismissal. What should have happened to prevent improper action, and Resulting changes in corporate practices We believe that the issue was in the company incompetence to provide adequate and effective supervision programs, and procedures for the employees t o abide.Lack of supervision from Jim Mountain, as a manager towards the employees, and poor corporate culture has resulted in a failure of employees ethics. A stricter procedural rules and more effective management control should have been imposed and fulfilled. No changes to laws or regulations were performed. The circumstances Of his dismissal for allegedly breaching trading rules and the regulators investigation of his conduct while working at Citibank. For good measure, the banks statement added Berrys misconduct breached fundamental terms of his employment with Scotia and was just cause for termination.He violated the trust and responsibility that accompanied his poss. Zion. http//business functionalist. Com/2013/02/after-allegations- against-former-top-Citibank-trader-dismissed-its-now-Mann-a-Mann/ IIRC had brought two sets of allegations against Mr.. Berry claiming that he violated uniform market integrity rules during the dispersion of new securities. The panel noted that after obtaining commitments from clients to buy shares in a new issue, some of the sales went through syndication while others went through Mr..Berrys inventory account. Because no commission was charged on all of these new-issue sales, some clients knew that the shares didnt come from syndication. And what more the trade occurred when the expression of interest was made -? even though the trade confirmations didnt show the usual new issue trailer. Everyone concerned understood that they were trading a new issue, noted the panel, adding that prior to Mr.. Berry being terminated his employer had no written syndication process policies or procedures. In each of the two prior years to Mr..Berrys dismissal, he had earned $15- million, when CEO Rick Hugh made an average of $8-million and few on the Street would dream of devising as much. Mr.. Berry, who is currently suing Citibank for constructive and wrongful dismissal Documents obtained by the financial post suggest that, about six months before his termination under the cloud of the now-dismissed allegations, the ann. was seeking outside legal opinions on the ramifications of renegotiating his contract to stop paying him so much. The documents also said Mr..Berry could be fired in the event of any of a regulatory breach, trading losses, or a violation of the banks code of conduct. http// business. functionalist. Com/2013/02/21/after-allegations-against-former-top Citibank-trader-dismissed-its-now-Mann-a-Mann/ http// business. functionalist. Com/2013/01/1 5/IIRC-chaw urges-against-David-berry- dismissed/ However, things sour sour after Citibank created a new contract limiting compensation up to $1 0 million unless stated by management. Berry had not signed this new contract in April 2005.In May 2005, a regulatory precursor to the IIRC issued a warning letter to Mr.. Berry. By the end of June 2005, Berry had been terminated with his group having chalked up about $43-million in net income. One year later Mr.. Berry filed a $1 00-million claim alleging constructive and wrongful dismissal. In turn, the bank has filed a statement of defense and counterclaim. Was Citibank trying to save themselves to the possible illegal trading activity conducted by Mr.. Berry, or was it the top executives jealousy the main driver for Berrys firing?