UNETHICAL PRACTICES IN FINANCE SECTOR.

Describing unsuitable behaviour, even if the behaviour is legal. Unethical behaviour can violate a code of conduct for a particular industry or sector. Professional organizations can censure or revoke the licenses of those professionals who are found to have committed unethical acts.

SOME EXAMPLES OF UNETHICAL PRACTICES

1.  Holding up bills of vendors on silly reasons and ultimately buying from others to avoid payments to earlier vendors.

2. Delay in paying wages, paying interest to financiers, paying incentives, paying bonus to employees.

3. Cheating employees of their dues towards medical expenses, not providing leaves, children education fees, etc.

UNETHICAL THINGS IN FINANCE

FRAUD

A fraud may be a dishonest act by an employee that end personal benefit to the worker at a price to the employer. Example- a bookkeeper in small company diverted Rs. 75000 of bill payment to a private checking account over a 3 year period.

MISLEADING budget

Before investing money investor want to understand the company's financial position and performance. they need to ascertain the record and earnings report . So, financial companies sometimes intentionally prepare false budget to enhance their chances of getting invested.

INSIDER TRADING

A trading of corporation's stock or other guarantees by individual with access to non-public information about the corporate, it's unfair would destroy the safety markets by destroying investor trust.

THE KETAN PAREKH SCAM

The Ketan Parekh scam was the second biggest scam the move backward the Bombay Stock Exchange after the Harshad Mehta scam. Ketan Parekh was also known as the Pied Piper of the Dalal Street. When Harshad Mehta (biggest scammer of the Bombay stock market) believed to be single handedly driving the stock market, Ketan Parekh had created a 200% annual return on some stocks. Then, the low profile Indian stock market was instantly once again making caption all over the world. Later, it turned out that it was broker turned operator Ketan Parekh that was operate the market and not changes in the fundamentals.

THE ILLEGALITIES

The complication with Ketan Parekh's dealing was two-fold:

1. Firstly, he had been receiving money from the supporters of many companies to take their share prices up. This can be seen as insider dealing and by itself was enough to get Ketan Parekh into severe difficulties.

2. However, to top it up, Ketan Parekh had also rob large amounts of cash from the Madhavapura Mercantile Commercial Bank. He was trust to have suborn the officials of the said bank to move them to lend against shares to a greater extent than was permitted by law. First, the bank crossed its prescribed limits to lend against market securities as it extended credit to Ketan Parekh. Then the bank started making unsecured loans to him. The loans would be permitted first and the security would be collected a few days later making the loans unsecured for the interim duration.

I hope my blog will be informative to you and do share your views on this blog by commenting on it.

Thank You,

Sunil Kumar Sahu