This paper addresses the impact of the unethical business conduct of a few individuals that shook the financial market in 1986. Specifically, in the study undertaken for this paper, the wealth status of the shareholders of securities firms was examined in relation to the public disclosure of the insider-trading scandals involving Dennis Levine, Ivan Boesky, and their confederates. It was hypothesized that the expected market-adjusted stock returns for the securities firms would be negative as a result of the scandals. The (...) findings of the study supported the hypothesis. (shrink)

This paper deals with the conflict between the desire of an employer to test employees for honesty and chemical dependency, and the right of the employee to privacy. Not only is the physical privacy of the employee infringed upon, but the psychic privacy of the individual as well. It is the conclusion of the paper that such an invasion of privacy is not justified without serious and compelling reason, and not the mere chance that testing will reveal problems among some (...) percentage of the tested persons. (shrink)

Certain types of corporate charter antitakeover amendments, or shark repellents, may not serve the interests of the stockholders or the stakeholders of the firm. This paper extends the examination of the use of shark repellents by taking an ethical perspective to synthesize prior research on shark repellents and their relationship to stockholder and stakeholder welfare. Some shark repellents seem to benefit certain interest groups at the expense of other groups.

This paper examines the ethical implications of "poison put" provisions included in bond offerings. A number of firms are using event-risk protections in bond offerings in an effort to attract investors back into the bond market. One of the most common event-risk protections is a "poison put" provision, which allows the bondholder to "put" the bond back to the firm at par or at a premium under certain specified conditions, such as a takeover effort or a downgrading of the bond (...) by rating agencies. While such a provision is obviously of value to the bondholders, there is a secondary effect that is not as obvious. Using such a provision helps to insure that boards of directors must put the interests of all of the stakeholders ahead of any personal interests of the board members, thus protecting the stakeholders. The use of event-risk protections helps to deter takeovers, induce bidders to negotiate with management in any takeover efforts, and avoid two-tier takeover offers. As a result, the "poison put" provisions have a positive impact on share values while simultaneously protecting the investments of bondholders. Such an impact makes the use of "poison put" provisions in bonds an ethical use of management power. (shrink)