Ethics, law and morality have always been virtually inseparable in the investment industry, as well as in other walks of life. As will be discussed below, many of the ethical concerns you have as an FA are also legal considerations.   An ethical transgression may be viewed as a violation of a rule of either your firm, the Department of Insurance, the SEC or other State Securities Regulators; or even subject you to criminal statutes that govern our industry.

For this reason, this course will examine a variety of ethical considerations that are premised on statutory requirements and on the rules and regulations of the self-regulatory organizations (SRO’s) and the SEC.

The word ethics is derived from the Greek words ethos (customs) and ethikos (moral). Plato tells us that Socrates, the patron saint of moral philosophy, refused to pay bribes for his escape after he was condemned to death by a jury. Even though he was innocent, Socrates believed it would be morally wrong to disobey the principles of society. We have similar examples in our history where moral principles were placed above life itself:

“Is life so dear or peace so sweet as to be purchased at the price of chains and slavery?…I know not what course others may take, but as for me give me liberty or give me death.”

-Patrick Henry, 1775

In business, ethics are not generally stated in such stark or absolute terms.  Often the line between right and wrong is not clear. Yet, an ethical lapse can result in the loss of faith in you by your clients and your employer. A serious breach of ethical standards can result in sanctions by your firm or the regulatory authorities or, in extreme instances, end your career.