Using two experiments, I examine how apologizing for fraud influences investor's avoidance and revenge behavior. Investors in experiment one report how many shares they would sell and how likely they would be to pursue legal punishment after discovering fraud has occurred in an organization they are currently invested in and subsequently reading about management's response to the fraud. I manipulate the nature of fraud as fraudulent financial reporting or asset misappropriation. I also manipulate whether management apologizes, scapegoats responsibility, or remains (...) silent after the fraud. Results show avoidance and revenge behavior is more negative after misreporting fraud. Data suggest that this difference may be partially attributable to the underlying moral norm that is violated. Specifically, misreporting is primarily a moral violation of deception, whereas embezzlement is primarily a moral violation of stealing. Results also show differential investor reactions depending on the type of fraud and management's response. For misreporting, revenge behavior is higher when management apologizes, but there is no effect on avoidance behavior. For embezzlement, avoidance behavior is reduced when the organization apologizes, but revenge behavior is unaffected. In experiment two, I replicate the misreporting condition from experiment one and manipulate apology sincerity. Results show that apology sincerity is positively associated with revenge behavior. Results of these two experiments extend both accounting and trust repair research by emphasizing the importance of disentangling moral integrity-based trust violations and that the adage of "just say you're sorry" is helpful in some situations and harmful in others. (shrink)

Seizing the opportunity to apply what they had learned, the students declared a cheating competition. Outspoken participants (future lawyers, politicians, and captains of industry) bragged about their ruses. But to their chagrin, an ethics student prevailed.

The subprime mortgage crisis which was caused to a large degree by questionable mortgage lending and securitization practices that were furthered by deregulatory policies devastated the economy, led to large scale unemployment, and caused the foreclosure of millions of homes. There is evidence that numerous mortgage companies, financial firms, rating agencies, and high-level professionals were involved in unethical and often fraudulent business practices leading to the most severe economic meltdown since the Great Depression. In spite of the great economic and (...) social harm, there was a lack of criminal sanctions against those companies and individuals, who were involved in creating the crisis that reached even global dimensions. This article analyses the reasons for and the possible social impacts of the lack of criminal sanctions against those who crossed the line between unethical and criminal business practices. (shrink)

In this article, I defend the idea that there are important differences between lying in politics and lying in general. My aim is to show that the issues with political lies do not have to do only with metaphysical or conceptual questions regarding what politics is or what the concept of the political means, or only with the validity of the excuses and justifications commonly offered in favor of political liars. I hold that the political lie is a special form (...) of lie due, first, to the peculiarity of the use of language in politics, and second, to the function that political lies play in political discussions: they undermine several epistemic conditions needed to impartially discuss social disagreements. In this work, however, I leave unanswered the question of what might be the best way to account for the epistemic conditions of democratic political discussion. (shrink)

This paper argues that for the purposes of any sort of serious discussion about immoral conduct in sport very little is illuminated by claiming that the conduct in question is cheating. In fact, describing some behavior as cheating is typically little more than expressing strong, but thoroughly vague and imprecise, moral disapproval or condemnation of another person or institution about a wide and ill-defined range of improper advantage-seeking behavior. Such expressions of disapproval fail to distinguish cheating from many other types (...) of immoral conduct. The discussion shows that we should set the concept aside and assess the moral disapproval implied by claims of cheating by reference to the moral and other principles that underlie the practice of sport. This allows us to consider carefully the complexity of the issues that are raised when allegations of cheating are made and not be distracted by the emotionally loaded, conversation-stopping tendency of the concept. This means that some types of disputes in sport will be messy and demand more effort to resolve, but the payoff will be better informed and more thoughtful discussions and greater awareness of the moral complexity of sport and of its principled underpinnings. (shrink)

The article provides an outline of the basic principles and conditions of criminalisation of interferences with others’ property rights in the context of a specific context: a liberal, social democratic state, the legitimacy of which depends primarily on its impartiality between moral doctrines and the fair distribution of liberties and resources. I begin by giving a brief outline of the conditions of political legitimacy, the place of property and the conditions of criminalisation in such a state. With that framework in (...) place, I argue that interferences with others’ property rights should be viewed as violations of political duties stemming from institutions of distribution. I then discuss three implications of this view: the bearing of social injustice on the criminal law treatment of acts of distributive injustice; the expansion of criminalisation over the violation of distribution-related duties, which are considered criminally irrelevant under moral conceptions of criminalisation; and, finally, the normative significance of the modus operandi. (shrink)

In light of recent doctrinal changes, we examine the confused state of U.S. insider trading law, identifying gaps that permit certain market participants to trade on the basis of material nonpublic information, and contrast U.S. insider trading doctrine with the European approach. We then explore the ethical implications of the status quo in the U.S., explaining why the dominant legal justifications for prohibiting classical insider trading and misappropriation—the fiduciary duty and property rights theories—fail to account for the wrongfulness of insider (...) trading by eavesdroppers and certain tippees. We refute common arguments for legalizing insider trading, including arguments that insider trading is a victimless crime and that the practice promotes efficiency. We explain why insider trading constitutes the moral wrong of cheating, grounding our theory in the legitimate expectations of market participants. Having considered Kantian deontology in other work, we find that virtue ethics theory offers a helpful albeit rough framework for assessing the morality of insider trading independent of its legality. We also find that social contract theories, with norms of equality of opportunity and moral desert, provide a compelling ethical basis for retaining, clarifying and broadening current legal prohibitions against insider trading. (shrink)

Although the managerial practice of cheating spans complex and heterogeneous situations, most business ethics scholars consider that the very idea of cheating is indefensible on moral grounds, and quickly dismiss it as wrongdoing. This paper proposes to fine-tune this conventional moral assessment by arguing that some forms of cheating can be justified—or at least excused. To do so, it starts with a value-free definition of cheating that covers a wide diversity of situations: “breaking the rules while deliberately leading or allowing (...) others to think they have been respected.” While using this definition at the metaethical level, the paper contends that the moral assessment of cheating depends on the obligation to comply with the rules. There are rules which do not entail moral obligations, and there are special circumstances where other more important obligations override the obligation to comply with the rules. Furthermore, the paper argues that respecting the penalty rules also influences the moral assessment of cheating on the rules. The key interest of this endeavor lies in contributing to building a more solid theoretical framework for the study of cheating in management, which may replace our common prejudices and basic intuitions on this matter. (shrink)

Workers who go on strike are sometimes accused of holding their employer “to ransom”, the implication being that strike action is a kind of extortion. The paper provides an analytical reconstruction of this objection, before presenting and interrogating different strategies for countering it. The first says that work-stoppages can only be extortionate if they infringe an employer’s rightful claim to productive labour, but that no employer has any such claim under capitalism. The second says that work-stoppages cannot be extortionate because, (...) by themselves, they cannot put an employer under duress. The third and most promising strategy says that an employer’s claim to the productive labour of workers is conditional upon his/her not exploiting them. This approach does not produce a blanket exoneration; it tells us that the aptness of describing a strike as extortionate depends on a prior appraisal of the conditions that the strikers work under, and the fairness with which they are treated. (shrink)

Einer weit verbreiteten Auffassung zufolge ist es moralisch besser, eine andere Person in die Irre zu führen als sie anzulügen. Diese Auffassung ist in neuerer Zeit jedoch ausführlich von Bernard Williams und Jennifer Saul kritisiert worden – ihnen zufolge verdankt sich unsere moralische Präferenz für Irreführungen einem Irrtum und lässt sich bei näherer Betrachtung nicht aufrechterhalten. Im ersten Teil des Aufsatzes versuche ich demgegenüber zu zeigen, dass es in manchen Fällen tatsächlich moralische Gründe gibt, statt zu lügen in die Irre (...) zu führen. Im Mittelpunkt steht dabei eine expressive und beziehungsorientierte Analyse von Irreführungen: Wir können mit Irreführungen, so die zentrale These, im Unterschied zu Lügen zumindest in manchen Fällen zum Ausdruck bringen, dass wir die andere Person respektieren und uns die Fortführung einer vertrauensvollen Beziehung mit ihr am Herzen liegt. Im zweiten Teil weise ich dann allerdings nach, dass die moralische Präferenz für Irreführungen nicht in allen Fällen gerechtfertigt ist – zum einen, weil der mit Irreführungen zum Ausdruck gebrachte Respekt gegenüber anderen Personen nicht immer angemessen ist, und zum anderen, weil mit Irreführungen nicht in allen Situationen Respekt vor der anderen Person und ein Interesse an einer vertrauensvollen Beziehung mit ihr zum Ausdruck gebracht werden kann. (shrink)

The Kamay and Hill insider trading conviction in Australia highlights many of the issues and problems involved in the prevention, detection and prosecution of insider trading. The case uniquely highlights how ethical behaviour is instilled at home, in school and in society, and the need for ethical responsibility at the personal and organisational level to complement legal rules and enforcement. We use the Kamay and Hill case to explore the reasons behind the failure of the traditional top-down approach to insider (...) trading prevention, where institutional ethical codes of conduct largely reflect and rely upon national rules, norms, and regulation. We propose a bottom-up approach to ensure that individual and organisational behaviour is ethical, where emphasis is not on compliance but on a set of core ethical values that allow individual and corporate expression. It is our strong belief that compliance cannot replace ethics. (shrink)