Resources
Case Studies
Excessive entertainment and gifts
Margaret, an account manager of a brokerage company, had maintained close relationships with her clients and always shared her investment views with them. One afternoon, a client, Daniel, called Margaret. He was in a jovial mood and explained to Margaret that he had just earned a considerable sum of money from the recent rise in the stock market. He then invited Margaret and her subordinates for dinner in a very luxurious restaurant. After a sumptuous feast, Daniel also presented Margaret with an antique watch.
Case Analysis
If the advantage offered, i.e. the antique watch, was not a reward for Margaret in abusing her official position, Margaret might not contravene the Codes of Conduct[1] issued by Securities and Futures Commission and the Prevention of Bribery Ordinance (POBO). However, she should be mindful of situations which might lead to the violation of the Codes of Conduct and the law. Margaret should seek her principal’s (i.e. employer’s) approval before accepting the gift. Moreover, she should decline the gift if she felt that the acceptance would put her in a position of obligation to the offeror. In case of doubt, it would be prudent for her to consult her employer on whether she could accept the gift.
Although entertainment is common in business practice and is not an advantage under the POBO, Margaret should avoid accepting excessive levels of entertainment which might affect her objectivity in dealing with clients.
[1] Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Corporate Finance Adviser Code of Conduct and the Fund Manager Code of Conduct.