Conflict of Interest

occurs when a person acts in a way that is

to his advantage at the expense of the
employing organization
the conflict of interest violates the
principles of impartiality
the common factors that create conflict of
interest are commercial bribes and gifts.

General Principles:
Conflict of Interest
The term "conflict of interest" means
something more then individual bias.
The term "conflict of interest" applies only
to current interests.
The term "conflict of interest" applies not
only to the personal financial interest of
the individual but also to the interest of
others with whom the individual has
substantial common financial interest.

Types of Conflict of Interest

1. Self-dealing
2. Accepting benifits
3. Influence peddling
4. Using your employers property for private
advantage
5. Outside employment or moonlighting
6. Post-employment

Insider Trading
refers to the significant facts that have not yet
made public and are likely to affect stock prices
SEC define insider as:
a) the issuer
b) a person controlling the issuer
c) a security that is not generally available to the
public
d) a person who learns such information by a
communication from any of tghe forgoing
insiders.

Moral Arguments (Insider)

1. Someone within the firm using information
for his own private gain, at the expense of
the firm (confict of interest).
2. Use of information by someone within the
firm to secure personal advantage over
those not in the firm (breach of loyaty).

Ethical Issues to Insider Trading

It violates fiduciary relationships between
insiders and outside clients.
It promotes greed and and personal gain
at the expense of others.
It renders the transaction between two
contracting parties as unfair.

Tax Evasion and Tax Avoidance

Tax Evasion
- is "intensional negligence" of the obligation
to pay correct taxes to the government.
- in Ethical means:
1. The intension to cheat
2. Knowledge that tax evasion is wronhg
3. By fraudalent means

Tax Avoidance
- is also known as tax minimization or tax
planning and it is not punishable by law.