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Wall Street Business Ethics Expository Essay

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Updated: Sep 9th, 2021

Social welfare should be among the priority of any financial institution and business organization that strives to receive regular profits. Threats imposed to moral and ethical stability of human environment can also create challenges for all financial structures ignoring business ethics.

Before the collapse of the Stock Market in 1929, the security business experienced significant expansion and prosperity, but the financial environment failed to encourage trustful relationships due to numerous cases of corruption, conflict of interest, and scandals (Santoro and Straus 99). The crash of the financial system marked the downfall of the entire business institution, as well as the advent of the Great Depression period.

With regard to the above-presented challenges, the government and public sector should take serious measures to restore trust and respect and ensure transparency of reporting in the security markets. Currently, Wall Street is also considered a controversial issue of economy because of negligent attitude to all stakeholders involved in carrying out business.

The analysis of Wall Street ethics should be associated with profit making through brokerage transactions, releasing new securities, and investing banking fees. Wall Street did its best to raise revenues and get the maximum benefit from its operations. At this point, new developing models of firms also undertook significant financial risks by putting their capital at stake.

Further transactions and financial operations became the precursors of the financial crisis. According to Santoro and Straus, “[m]ismanaged Wall Street firms were to become almost singularly obsessed with betting the house on mortgage-backed securities” (101). Therefore, negligence of societal welfare and focus on business transactions was the main sign of low morale in the workplace.

The situation worsened when the significance of business partnerships and unions diminished. Specific attention requires the case with Solomon Brothers, whose incomes from proprietary trading turned the venture into the most profitable company on Wall Street. Their model also focused on financial rather than ideological and ethical consideration, which also became one of the reasons for the outburst of the 2008 financial crisis.

Specifically, the firm established a priority in proprietary selling of debt securities presupposed by compensation system, causing excessive risk and inappropriate attitude to clients.

The case with Solomon contributed to the bad reputation of the Wall Street sector that was considered a corrupted system exploiting rather than respecting customers. The case also made the Wall Street business world think over the importance of integrating specific ethics and moral codes that would allow to restore their image and develop a rich customer culture.

Negligent behavior and inappropriate treatment of clients has become the major reason for financial collapse at Wall Street. According to Wallis, “…the behavior of the rich on Wall Street is an affront to our basic understanding of values like commitment, integrity, fairness, and loyalty to others besides themselves” (223).

By underestimating human capital, the Wall Street business world failed to undertake the consequences of financial crisis. In fact, realization that any financial institution should premise on a variety of external and internal stakeholders shaping the entire business environment was absent. As a result such ignorance, Wall Street financial giants confronted moral and economic collapse.

Maltreatment of employee environment, as well as disregard for clients also raised concerns with the legal issues and justice system. The Wall Street sector was also involved into numerous white-collar crimes, leading to the development of gap between wealthy and poor people residing in the United States.

The historical perspective of outlaw actions committed by employees refers to the low employee morale and excess focus on financial benefits. According to Jordan, “contrasting the wealth of the 1 % with the wealth of the 99 %, working class people are protesting, in part, because their employment prospects are dwindling” (491).

Most of individuals accused of white-collar crimes resorted to outlaw actions to receive personal financial benefit. As a result of multiple legal cases associated with Wall Street financial policy, the social media gave emotional and moral resentment to publicity.

The victims suffered from financial fraud expressed their deep disappointment and concern with financial operations carried out in the district. Sub-prime mortgage and house bubbling became the evident violation of social corporate responsibility and inappropriate attitude to clients’ security and welfare.

In conclusion, business community, like any other social medium, should also take moral and ethical values into deepest consideration to maintain trustful relationship with clients. Additionally, employee culture and internal processes held at Wall Street prove that disregard for clients and other important stakeholder may lead to financial collapse, as well as to failure to sustain economic prosperity.

Exploiting, rather than respecting clients, has led to disruption of the financial system and serious economic recession in the United States and abroad.

Wall Street as a leading financial network should have considered low ethical moral as the major underpinning for the financial crash occurred in 2008 due to inappropriate mortgage policy. Therefore, the business world should make appropriate conclusions from the lessons of the past to ensure successful economic development.

Works Cited

Jordan, Sandra D. “Victimization on Main Street: Occupy Wall Street and The Mortgage Fraud Crisis.” Fordham Urban Law Journal 39.2 (2011): 485-510. Print.

Wallis, Jim. Rediscovering Values: On Wall Street, Main Street, and Your Street. US: Simon and Schuster, 2010. Print.

Santoro, Michael. A., and Ronald J. Straus. Wall Street Values: Business Ethics and the Global Financial Crisis. UK: Cambridge University Press. 2012. Print.

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