Practical analysis for investment professionals

Standards, Ethics & Regulations (SER)


Book Review: Winning Investors Over

The job of management is to maximize corporate value, which leads CEOs to seek ways to boost their companies’ stock prices. Although generating consistent long-term earnings growth for shareholders would seem the obvious path to reaching that goal, every company will experience difficult times. The question is whether shareholders will regard a down quarter or year as simply a short detour on the overall journey or consider short-run earnings misses significant.

Ethics Roundup: Widespread Insider-Trading Crackdown on the Horizon

“Even the most rational approach to ethics is defenseless if there isn’t the will to do what is right,” Alexander Solzhenitsyn said. This quote came to mind after reading about widening investigations into insider trading in the U.S. and U.K. governments.

Is a Floating NAV the Fix Money Market Funds Need?

The $2.7 trillion U.S. money market fund industry, which greases the wheels of industry while offering institutional and individual investors a vehicle for cash management and savings, is being targeted for regulatory reforms designed to make it more transparent and less risky. But critics argue that adoption of the proposed changes may trigger unintended consequences with far-reaching effects.

Three Questions about the Facebook IPO

Unless you have been living under a rock, you must be aware that Facebook, the “darling” of social media, is about to go public. But before investors slake their thirst for Facebook shares, market participants should consider three questions.

Codes of Ethics: If You Adopt One, Will They Behave?

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?

Ethics Roundup

Unfortunately, stories of unethical behavior by both individuals and financial institutions continue to dominate the business news headlines. Insider trading and the integrity of asset managers' performance reports have been major themes over the past few months.

Dubious Measures: Hedge Funds’ Reporting Draws Scrutiny

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.

Take 15 Series: The Benefits of Complying with the GIPS Standards

Iain W. McAra provides insight into the many benefits gained by firms claiming compliance with the Global Investment Performance Standards (GIPS®). He also discusses how firms can leverage compliance for stronger internal controls and better portfolio oversight.

Occupy Wall Street and Islamic Finance: Economic Justice Is Enticing — But Elusive

Both OWS movement and Islamic finance aspire to reduce economic injustice but experience of Islamic financial sector shows that economic justice is enticing but elusive.

The Hildebrand Case: Ethics and the Power of Perception

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.”



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