BUSI 2301 Business Law : Objective Standard of Behaviour

s for covering the bank overdraft, which was posing as a threat over the financial position of the firm. This was a misuse of all the professional standards and laws, as this presented a false view of the finances of the company, instead of its true and fair position. However, this was not done by Corzine directly and even O’Brien agreed that she was not forced to do so. So, Corzine did not indulge directly in any unlawful act.

However, there was an unethical and a non-managerial conduct undertaken by Corzine as he asked his subordinates to undertake unethical work. He abused his official position, which is deemed as an ethical breach. Abuse of power is the malfeasance in office which affects the performance of the official duties (Zgheib, 2014). When a boss uses his official position in an unfair manner, where his subordinates are forced to follow unethical orders of the superior, due to the pressure of the superior, it is deemed as an abuse of official position (Wieland, 2013). In this case, Corzine used his position, where O’Brien was indirectly directed towards undertaking the changes in the finances of the company. He also failed in his managerial obligations as instead of preaching ethics to superiors, he breached them. Hence, Corzine behaved in an unethical manner with poor managerial perspective, if not explicitly illegal. Corzine should have opted for other means to improve the position of the company, instead of representing a false position.

Question 2

Each and every individual in the organization is required to work in a manner where the ethics and morals of a person are upheld. As an executive of the company, she was under the obligation to further the goals of the company and not of the CEO, in such a manner that it was ethical (Crane & Matten, 2016). This is particularly with respect to the ethical theory of utilitarianism, as per which an individual has to work in such a manner that the greater good is upheld and where such actions are deemed as ethical which result in the utility being maximized (Albee, 2014). When the investigations were undertaken, particularly the criminal one, it was concluded that the law was not contravened by MF Global employees in an intentional or deliberate manner.

O’Brien was required to be transparent in the undertaken actions and should have flagged the choices for their decision. Instead of going forward with the plan of Corzine, in showing the transaction where the financial position was wrongly depicted, O’Brien undertook the unethical act. Just because her boss requested, she undertook an unethical act. She should instead have gone to the ethical committee of the company or to the regulatory authorities regarding this “request” of her superior instead of upholding the unethical requests of her superior and undertaking unethical task.

On the basis of ethical theory of virtue ethics, she was required to show her virtue, in terms of virtue of character and mind. A virtuous person has to show integrity, honesty, justice and similar qualities while undertaking any act. However, when the request of the superior was upheld, to show the position of the company in a wrong manner, the virtues of honesty, integrity and justice were not upheld (Hooft, 2014). She was a lifelong manager of the company and even though Corzine had not directly ordered him to take the funds from the customer accounts, it was done, even when she knew it was a wrong thing to do. To save the company from bankruptcy, this was not the correct step.

Question 3

The actions undertaken by Corzine were that in order to save the company from being shown as bankrupt, he directed O’Brien to transfer millions of dollars from the customer’s account to the bank overdraft. And even though this was not a direct request, this was done by O’Brien deeming that she had no other choice. However, this is far from true, and as discussed above, she could have gone to the regulatory authorities or could have become a whistleblower and should not have upheld the request of her boss.

When there is a failure in using the rationale care of avoiding results which pose a threat or harm to the safety of the general public and which are the reasonably foreseeable result of acting in a specific manner, it is deemed as criminal negligence. Criminal negligence is a statutory offense which is born in such circumstances which involve the death of innocent people, due to some negligent task (Weigend, 2014).  There is a need to establish mens rea or guilty mind to uphold the presence of criminal negligence. Though it is not strictly mens rea and refers to the objective standard of behaviour of an individual (Dressler, 2015).

The actions of Corzine or O’Brien, even though were grave, but did not attract criminal negligence. This is because they did fail in the objective standard of behaviour, as was required based on their position but there was no serious harm caused to another party. Yes the consumers were affected, particularly in financial terms, but the same was not a threat on their wellbeing. And hence, the two were not criminally negligent.

However, the same cannot be said when it comes to ethics, as both of them were unethical in their conduct. In their attempts to save the company, they failed to uphold the golden rule of the companies where the needs and interests of the company are to be given preference (Buckingham & Coffman, 2014). This was not done. In order to show that the company was not bankrupt, Corzine and O’Brien adopted the wrong financial position of the company by transferring the customer funds to the bank account. This was a purely unethical task and cannot be marked as a bad judgment. Just because one states that they did not know the consequence of an action, did not mean that it was the right thing to do, when it clearly seemed to be unethical and unlawful. Hence, the acts undertaken by Corzine and O’Brien were unethical, and not criminally negligent and bad judgment.

Question 4

In this regard, the company’s ethics and compliance officers also breached their ethical duties. It was the duty of the ethics officer to form and further the ethics of the company, which reflects the vision and mission of the company. There was a need to follow code of ethics and ethical practices in the company. There was also a need to ensure that ethics were followed across the organization. And when any person breached the ethics, there was a need to impose ethical practices. So, when Corzine and O’Brien decided to use the client money for purpose of bank account, the ethics officer should have put a stop to it and also should have presented this before the board of the company, so that timely actions could have been undertaken, to deal with the menace created through such unlawful transfer. This would have proved as an example to all the other employees, that irrespective of the position which the person held in the company, there was a need to follow the ethics before everything else.

The compliance officer, as the name suggests, was under an obligation to ensure that the company undertook all the compliances, as were required. There was a need to make certain that the money of the company was being used for the purposes for which it has been obtained, and this was particularly true for the money related to consumers. By allowing the wrong use of the client’s money to bank account, just to show that the company was not bankrupt, when in reality, it was the case, the compliance officer failed to uphold his duties. He should have firstly not allowed this transaction, and when it did happen, should have reported the same to the board, along with the audit committee, so that they were aware of the wrong being undertaken in the company. Hence, the ethics and compliance officer failed to play their requisite role in their position, in this whole fiasco.

References

Albee, E. (2014). A history of English utilitarianism. Oxon: Routledge.

Buckingham, M., & Coffman, C. (2014). First, break all the rules: What the world's greatest managers do differently. New York: Simon and Schuster.

Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford: Oxford University Press.

Dewey, J. (2016) Ethics. Worcestershire: Read Books Ltd.

Dressler, J. (2015). Black Letter Outline on Criminal Law. St Paul, MN: West Academic.

Hooft, S.V. (2014). Understanding virtue ethics. Oxon: Routledge.

Noddings, N. (2013). Caring: A relational approach to ethics and moral education. California: University of California Press.

Weigend, T. (2014). Subjective elements of criminal liability. Oxford: Oxford University Press.

Wieland, J. (2013). Standards and Audits for Ethics Management Systems: The European Perspective. Germany: Springer.

Zgheib, P.W. (2014). Business Ethics and Diversity in the Modern Workplace. Hershey, PA: Business Science Reference.