In any commercial activity carried out in a country, the government has an interest in it. Therefore, in carrying out the business, the government will set up the laws for private investors to follow. Contradicting the government rules and regulations makes the firm’s external business environment quite unfriendly because the government may impose unfriendly business policies to chock the firm’s investment (Bagley, 2005).
UAE government made a demand to Research in Motion (RIM) to make a way through which the government can monitor communication of co-operating blackberry users. Research in motion management should allow the government to monitor communication as per the communication law in the country. Thus, if the local legislation allows the government to eavesdrop on citizens’ communication the company should allow it. However, it is obvious that the customers will feel that the company is neglecting them by allowing the government to eavesdrop their conversations. In this regard, the company should allow the government to access such communication, but it should provide a written agreement regarding how the information will be used. In addition, the government should make an undertaking that the client’s information will not be exposed to third parties. These third parties may be competitors or private citizens with interests in clients’ communications (Bagley, 2005).
In case research in motion realizes that the government wishes to use the information to crack down on political dissent it should not allow the government to access the customers’ communications. There are several reasons why the company should change its mind. One, the government may change upon an election. Thus, the new government may be hostile to the company. For prosperity, the company should remain neutral in any political competition. Two, it is unethical for the company to allow the government to access customers communication with an intention of harming the customer. Thus, the company should protect its clients from unnecessary government oppression. Three, the main reason for information access by the government should be limited to national security. Thus, any other purpose should be rejected (Bagley, 2005).
The extent to which collateral manager should disclose information pertaining collateral debt obligations is determined by the impact of omission of the information. A collateral debt obligation manager should be non-partial in the entire transactions. He should therefore not act in the interest of any party. Thus, any omission or misstatement of information that seems to promote the interest of one party is unethical (Whalen, 2010). Anthony Karol is the managing partner thus; he has an obligation to serve all the clients impartially. He is aware of the interests of Nelipern & co. and that interests of investors will be adverse to those of Nelipern & co. Therefore, Danimark investment bank has a legal obligation to disclose Nelipern role in the selection process to all the potential investors. In case, Danimark fails to disclose the same it will be acting in a way that seems to protect the interests of Nelipern. The obligation in this situation is one that an agent owes principal (Adams, 2010). The relationship is based on confidence and trust of both parties. Thus, Danimark investment bank should fulfill its fiduciary duty by disclosing the material information to investors. In disclosing the information regarding Nelipern adverse interest to investors’ Danimark should consider the potential impact of the information to the investors. The fact that both the investor and Nelipern have conflicting interest places Danimark investing bank in an awkward position of serving two clients. It will be acting for the benefit of Nelipern alone if it fails to disclose all the Nelipern’s interests to investors. The investors have the right to not only know that Nelipern was involved in the selection process but also the Nelipern interests on CDO. The investors will have sufficient grounds to sue Danimark investment bank for non-disclosure of the material investment concerning Nelipern’s interest in CDO. According to Kant’s ethical theory that forms the basis of duties of fiduciary and agents every institution is obliged to be honest. It does not matter whether one party is unsophisticated or sophisticated. The baseline is that honesty is a moral obligation. Thus, even if Nelipern is a sophisticated investor Danimark investment bank must disclose all interests to the other investors. Partial transparency cannot be accepted (Bagley, 2005).
This transaction is quite different from a scenario where the bank sells securities of one client to the other. In the situation where the bank is selling securities of one client to the other, it just acts as a shop selling different products to different customers. In this regard, the purchasing client should carry out his investigation on the Securities he wishes to purchase. The purchasing investor cannot have grounds to sue a bank for selling securities whose prices fall.
If I analytics use its method and approve the CCBS it will affect karols analysis. This is because it is likely to give it a more accurate value that is impartial to all parties involved. In this case, Danimark investment bank should disclose all this information on the use of i-analytics because it is material to the investors (Whalen, 2010).
Danmark investing mark interest in buying the securities is a conflict of interest. This is because the economic interest of the bank is to maximize its profit (Whalen, 2010). Thus, its interest in the securities implies that it may not be partial in serving all the investors appropriately. Danmark investment bank will be acting as an agent for the investors in the transaction. It should work in the best interest the investors only; this interest is compromised if the bank wishes to purchase the securities. Thus, Danmark investment bank cannot be allowed to act as a principal of its own, yet it remains an agent to other investors in the same investment or transaction (Adams, 2010).
References
Bagley, C. (2005). Manager and the legal environment (8th ed.).
Adams, T. (2010, April 19). SEC/CDO Litigation: Why Aren't the Collateral Managers Being
Sued Too? | naked capitalism. Retrieved January 28, 2016, from http://www.nakedcapitalism.com/2010/04/seccdo-litigation-why-arent-the-collateral-managers-being-sued-too.html
Whalen, P. (2010, December 01). The Goldman Abacus Deal - Goldman Sachs CDO - Seven
Pillars Institute. Retrieved January 28, 2016, from http://sevenpillarsinstitute.org/case- studies/goldman-sachs-and-the-abacus-deal
