Michael McMillan, CFA, is director of ethics education at CFA Institute, where he is responsible for creating, sourcing, and developing educational content for CFA Institute members and investment professionals in the area of ethics and professional standards. Previously, he was a professor of accounting and finance at Johns Hopkins University’s Carey School of Business and George Washington University’s School of Business. Prior to his career in academia, McMillan was a securities analyst and portfolio manager at Bailard, Biehl, and Kaiser and at Merus Capital Management. He is a certified public accountant (CPA) and a chartered investment counselor (CIC). McMillan holds a BA from the University of Pennsylvania, an MBA from Stanford University, and a PhD in accounting and finance from George Washington University. Topical Expertise: Financial Statement Analysis · Standards, Ethics, and Regulations (SER)
Many institutions involved in the financial skullduggery that caused the 2008 crisis had adopted codes of ethics long before the housing bubble burst. Even Enron had espoused lofty ideals in it's official code. So why aren’t codes effective in deterring unethical behavior?
There is a plethora of research that has documented a number of “irregularities” in self-reported hedge fund returns. These studies have found that some hedge funds reported smoothed returns, reported disproportionately more small positive returns than negative returns, and reported higher returns in December.
The recent scandal that led Swiss National Bank chairman Philipp Hildebrand to resign highlights the difference between what is legal and what is ethical. The law tells us what we “can and cannot do,” whereas ethics tells us what we “should and should not do.”
A recent survey suggests that some investment advisers may be recommending alternative investment strategies that neither they nor their clients fully understand. In order to regain the confidence and trust of clients and the public at large, investment professionals must commit to doing a better job of understanding — and communicating — the features, characteristics, and risks of these complex strategies.
Who says that one bad apple doesn’t spoil the whole bunch? Just ask FrontPoint Partners who saw its assets under management decline with breathtaking speed—dropping by $6 billion in eight months—after one of the firm’s portfolio managers was caught… READ MORE ›
A few months ago, I wrote about how Groupon had been using a non-GAAP accounting metric, “adjusted consolidated segment operating income” (CSOI), to explain its past performance — a practice the online… READ MORE ›
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.