Business Ethics Violation

12 December 2016

Business ethics focus on what behaviors that are right and wrong in the business world. While business ethics violation is a reoccurring act of criminal or civil issues that often happen in the business world. It is defined as someone whom violates the law with a negative impact on the suppliers, consumers, and the society. Impacts such as accounting fraud, conspiracy, and securities fraud would be considered as illegal behaviors by the society that we live in.

Most business decision makers face more complex ethical issue in the market than in their personal lives while their choice can affect how they would be seen by society. Either a desire to maximize profit for the firm or use their position to capitalize on opportunity for themselves. Yet profit maximize is a right behavior for the firm, but being dishonest to the society is an unethical behavior and it is not fair to others.

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Raj Rajaratnam, who runs a hedge fund, Galleon Group, and is numbered 236th on the Forbes list of the 400 richest Americans.

Galleon Group was established in 1997, as a flexible investment company to help clients earn as much profit as possible through the market. Mr. Rajaratnam was successful in this field and was able to raise the firm into a $7 billion dollar company valued in the business market. Afterward, Mr. Rajaratnam suffered losses in the firm and eventually, withdrew all his shares from the company in 2008. While the Galleon Group value dropped to $4 billion in assets. Mr. Rajaratnam was arrested in October 2009 and charged with running the biggest insider trading scheme in a hedge fund’s history.

The investigator‘s use wiretapping and confidential witnesses in order to get evidence for this case. Justice Department and the Securities and Exchange Commission accused Mr. Rajaratnam and five others whom were relying on a huge network of insider trading and using the confidential information to make more than $20 million in profit from 2006 to 2009. This example relates to both, the business ethics violation and criminal issue. Raj Rajaratnam, manager and founder of Galleon Group developed this company through vast investors while benefiting himself and his close friends.

What he did was used confidential information given by corporate executives to make his profit as the expense of his own company. In my opinion, as an executive member of the firm, his obligation were to run the business in a right track, make rational decision in the growth of the business, and maximize the firm’s profit through ethical and moral stand point. If someone were to make an unethical decision, it would not only affect the company but also investors, and shareholders of the company as a whole. The vast majority of society is an investor, while this confines their willingness to invest in other companies.

Obviously, Raj Rajaratnam is being unethical because he used other company’s secret information to earn profit for his own. He cheated on the public and breached the law. I believe that his greediness would make him paid back. If I were the judge, I would convict him of insider trading and he would face 5 years prison time because 5 years is a long time for him to think about the consequences that he made.

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