Table Table of Contents

of Contents

• Consumer Fraud
• Financial Misconduct
Consumer Fraud
• Insider Trading
• Intellectual Property Rights
Financial Misconduct
• Privacy Issues
• The Challenge of Determining Ethical Issues in
Insider Trading
Business

Intellectual Property Rights

Privacy Issues

Ways in Determining Ethical

Issues in Business
 Occurs when consumers attempt
to deceive businesses for their own
gain.

- Involves intentional deception to

derive an unfair economic
advantage by an individual or
group over an organization.
 r
Lying fo Re tu r n
Price
T I te m a ge
Switc ag ing policies
hing switch discoun
ts misuse
.
a nd e t c
 Collusion; employee
assisting in fraud
A cashier
intentionally does
not scan all
merchandise or
gives a customer
Duplicity; staging an accident an unwarranted The advantage is unfair
discount because the person has
the intent to go against
the right behavior or
Is associated with a result
Guile; understand person who is crafty or

right/wrong behavior but

understands right/wrong
behavior but uses tricks
uses tricks to obtain an to obtain an unfair

unfair advantage
advantage.
 Financial Misconduct

Means Fraud, Gross Negligence or Intentional or

Willful Misconduct that contributes, directly or
indirectly, to the company’s financial or
operational results.

https://www.lawinsider.com
EXAMPLES

Misstatements and other irregularities in company records, including the

intentional misstatement of the results of operations or financial
wrongdoings.

Forgery or other alteration of company documents.

Fraud and other unlawful acts.

 Insider Trading
- An insider is any officer, director, or owner of 10 percent or
more of a class of a company’s securities.

Illegal insider trading is

Two types of the buying or selling of
insider trading stocks by insiders who
possess information that
is not yet public.
Illegal insider
trading
Legal insider trading
Legal insider in v o l v e s l e g a l l y b u y i n g
trading and selling stock in an
insider’s own company,
but not all the time.
LEGAL INSIDER TRADING ILLEGAL INSIDER TRADING

A lawyer representing the CEO of a company

learns in a confidential meeting that the
A CEO of a A board member CEO is going to be indicted for accounting
corporation of a fraud the next day. The lawyer shorts 1,000
buys 1,000 corporation shares of the company because he knows that
shares of buys 5,000 the stock price is going to go way down on
stock in the shares of news of the indictment.
corporation. stock in the
The trade is An employee of corporation.
a corporation A corporate officer learns of a confidential
reported to The trade is
exercises his merger between his company and another
the reported to lucrative business. Knowing that the merger
Securities stock options the Securities will require the purchase of shares at a
and Exchange and buys 500 and Exchange high price, the corporate officer buys the
Commission. shares of Commission. stock the day before the merger is going to
stock in the
go through.
company that
he works for.
A CEO of a corporation buys 1,000 shares
of stock in the corporation. The trade is
reported to the Securities and Exchange
Commission.
 Some notorious cases involving illegal insider trading

a. Jeffrey Skilling/ Enron

Corporation
b. R. Foster Winans/The Wall
Street Journal
c. Albert H. Wiggin/Chase National
Bank
d. Stewart/ImClone Systems
 Intellectual Property Rights

Are legal rights that provide creators

Involve the legal protection
protection for original works,
of intellectual property
inventions or the appearance of
such as music, books, and
product, artistic works, scientific
movies.
development and so on.
 Copyright is the legal Among the literary and artistic works
protection extended enumerated in the IP Code are Books
to the owner of the and Other Writings, Musical Works,
rights in an original Films and Photographic Works,
work. “Original work” Ornamental Designs or Models of
refers to intellectual Manufacture, Paintings, Sculptures,
creation in the literary, and Other works of Arts, as well
scientific and artistic Computer Programs and Mobile Apps,
domain. etc

Trademark and Service Any visible sign capable

of distinguishing the
Marks goods (trademark) or
services (service mark) of
an enterprise. 
 An industrial design is the ornamental 
or aesthetic aspect of an article.  The owner of a registered industrial 
Design, in this sense, may be three- design has the right to prevent third 
dimensional features (shape or  parties from making, selling or 
surface of an article), or the two- importing articles bearing or 
Industrial dimensional features (patterns or  embodying a design which is a copy, 
Designs lines of color). Handicrafts, jewelry, 
vehicles, appliances - the subject 
or substantially a copy, of the 
of industrial designs range from  protected design, when such acts 
fashion to industrial goods are undertaken for commercial 
purposes.
 An invention patent is a government- Patents may be granted to technical 
issued grant, bestowing an exclusive right  solutions such as an inventions, 
Patents to an inventor over a product or process  machines, devices, processes, or an 
that provides any technical solution to a 
improvement of any of the 
problem in any field of human activity 
which is new, inventive, and foregoing. 
industrially applicable

Lay out Designs of

Integrated Circuits
(Topographies) Protection of
Undisclosed Information
 Republic Act No.
8293
PUNISHMENT FOR VIOLATION OF Protects and secures the exclusive
INTELLECTUL PROPERTY RIGHT IN THE rights of scientists, inventors, artists
PHILIPPINE and other gifted citizens to their
intellectual property and creations,
particularly when beneficial to the
The Intellectual Property Office of people
the Philippines (IPOPHL) has
received a total of 135 intellectual
property (IP) violation reports from
consumers and complaints from IP
rights holders in the first nine
months of the year, surpassing the
129 received in the previous five
years up to 2019.
https://www.ipophil.gov.ph
 Privacy Issues

EXAMPLES
Consumer privacy, also known as customer privacy, involves the 
Consumer handling and protection of the sensitive personal information provided 
privacy by customers in the course of everyday transactions. The internet has 
evolved into a medium of commerce, making consumer data privacy 
a growing concern.

Employee Employee privacy rights are the rules that limit how an employer can 

Privacy search an employee's possessions or monitor their actions, speech, 
or correspondence
 Another way to determine if a
Most ethical issues concerning
specific behavior or situation has
a business will become visible
an ethical component is to ask
through stakeholder concerns
other individuals in the business
about an event, activity, or
how they feel about it and
the results of a business
whether they view it as ethically
decision.
challenging.

An activity approved by most

Problems can become ethical
members of an organization, if
issues as a result of changing
it is also customary in the
societal values.
industry, is probably ethical.
 END

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