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Nowadays, it’s unquestionable that a firm should operate at a high level of ethics. Many firms have Ethics procedures set in place to protect their reputation and benefit people beyond their walls. These procedures were established following previous ethics incidents that caused the demise of many great companies. In the early 2000s, the U.S. was battling a recession. The Federal Reserve lowered the federal fund rates, the rate at which banks borrow money; this created an opportunity for major banks and investors to gain access to loans that once were out of their reach. During that time, certain business regulations were absent and neglected. Mortgaged-backed securities (M.B.S), which constituted subprime mortgages, loans made to borrowers without proper financial qualifications, were widely promoted. Mortgage brokers were driven by bonuses received from lending, and financial institutions were highly leveraged in M.B.Ss and on unregulated over-the-counter derivatives that were used as insurance against M.B.S. In the movie margin call, the investment firm was highly leveraged in M.B.Ss. simultaneously the housing market was slowly collapsing. Subprime loan borrowers were defaulting, which caused many lenders to file for bankruptcy and eventually affected investors. As a result, the firm had to liquate its investments to prevent an unbearable financial loss. The firm’s decision to liquidate its assets, although necessary, disregarded all the principles of business ethics. Integrity The firm failed to fulfill its integrity duty toward its clients. As a result, the firm has ruined its clients’ relationships and reputations forever. When the analyst discovered that the firm was operating beyond its risk level, the executive team resorted to a decision that would put in peril the career of its employees, the reputation of the company, and the capital of investors. Since the firm was overleveraged in MBSs, especially at market prices that were already inflated, they feared that even a drop as small as 25% would render the company worthless. In order to prevent their own downfall and be left holding the bag, they were willing to drag everyone else down and mitigate their own risk knowing that the market crash was imminent given the current state of the housing market at the time. The company’s integrity was out of the picture; everyone from leadership to traders was encouraged to clear the books by selling to any accounts and clients, leaving out information about the turmoil faced by the company and the impact of their purchase. Major Banks such as Deutsche, merry lynch, and more were offered to purchase millions 30 years fixed maturity bond contracts at any price possible before the market opened. At the opening bell, the selling of these contracts created a snowball effect. Major Banks that believed their purchased price was at a discount realized their acquired prices were too high forcing them to sell to other investors and banks. The firm forwent its obligation to protect its investors and instead used them as an escape from its investment mistakes. Although the company goal was a success by the closing bell, their brands will be destroyed and will never be able to regain any clients’ trust. Leadership The firm violation of business ethics practices was due to poor leadership. Top executives are supposed to set an example for the rest of the company. They have to implement ethical procedures regarding their business practices and ensure that everyone else follows the same guideline to promote a healthy environment. Throughout the movie, there is a lack of accountability among the executive members of the firm. The head of the risk assessment, Sarah Robertson, have presented countless warning sign about the risk level firm to the CEO, John tuld, and Jared Cohen they never took action to remedy the situation. As a result, when they found out the scale of the issue in the risk report, they wanted to scapegoat Sarah in case everything went terribly wrong with their liquation. Additionally, the executive team also discourages honesty and transparency through bribery. The following morning when the traders came into the office, the head of sales, Sam roger, made it clear that the intention of the firm was to liquidate their assets. Soon after the announcement, he guaranteed a $1.3 million bonus to every trader who successfully sold 93% of their asset class, as well as a surplus of $1.3 million bonus for everyone if their collective sale reached 93%. Eager to earn a bonus, their sales team reached out to their clients and urged them to invest in securities that were longer profitable. They didn’t provide clear backing for their unexpected investment advice and alluded to their loss as their clients’ gain. Members of the executives’ team also received compensation packages with health care benefits and numerous options contracts in order to work with the company longer. The firm had proprietary information about the market and judged best to be the first to start the turmoil in the financial markets before other brokerages caused them greater financial loss. Top executives were willing to encourage toxic business practices and disregarded their duty toward their clients. Corporate Social Responsibility/ Fairness The firm financial success supersedes its social responsibility. Tuld knew the implication of having a fire sale and decided to move forward with his plan. The majority of the executive team was on board except for Sam before greed clouded his judgment. The fire sale would collapse the financial market, cause layoffs and destroy many investors’ portfolios. The first socially irresponsible action by the team was to lay off the backbone of the firm, the employees. Employees were given unfair treatment compared to the higher-ups. The employees work effortlessly to build relationships with clients and secure deals, and they were the first ones to be fired. Meanwhile, the executives were paid millions in benefit packages and weren’t laid off. Secondly, the firm didn’t account for the impact on the mass population. The average workers rely on the market's well-being in order for their retirement accounts to thrive. Before initiating the fire sale, the management team knew that it would take several years for the market to recover. This implies that retirement accounts will decrease in value substantially and hurt people who rely on these securities for years to come. The CEO believed in order to be successful; they needed to be “first, smart or cheat.” He abides by these principles rather than the proper business ethics. Tuld noticed the warning sign in many other financial industry leaders and decided they should be first at crashing the market instead of being at the mercy of other market participants. The firm survival was the most important than society as a whole. Conclusion The movie margin call shed light on the brutal truth behind the curtain of Wall Street in a time of crisis. Ethical principles weigh less than companies’ financial well-being. The workforce often experiences the initial impact as they get laid off. Higher management earns bonuses at the expense of their clients and investors who contributed to their success. Bribery and other forms of compensation are used to encourage unethical behaviors. In the end, the firm will weather the crisis while losing its reputation and will never be able to earn its client’s trust.