In this latest scandal, Invesco, the reputable Denver based mutual fund giant, has agreed to pay 376.5 million to settle allegations of improper trading. Invesco, headed by their former CEO had arranged for a handful of wealthy stockholders to participate in market-timing stock buying and selling (quick in-and-out trades that can skim profits from longer-term shareholders). The settlements will end investigative probing of the company from the attorney generals in Colorado, New York, Georgia, and the SEC.
The generally accepted goal of firms is to maximize wealth over the long term. Do to this generalized goal, many argue that a goal to maximize profit over the life of the firm is a better goal for a firm to subject to. However, as one can see, often times profits and ethics become conflicting interests. In this case, satisfying customers and ethics became conflicting interests.
This illustration of unethical behavior of business is a far cry from the Enron-Anderson disaster, but still criples confidence of american business ethics. When are companies going to understand that the market punishes and rewards ethics??http://www.msnbc.msn.com/id/5941226/