Solutions Sought: Ethics in Financial Markets

Below are the key issues and root causes for state of ethics in India's Financial Markets. Kindly review and help identify very specific solutions that can be implemented to address these issues. We will then compile a whitepaper and present it to SEBI and other stakeholders for their actions.

Transparency International India

Lack of Ethics in Financial Markets – Root Causes

1. Brokerage firms have become extremely profit oriented
2. There is a lot of pressure on the brokers to earn more commission for the firm
3. The terms and conditions signed while agreeing to work with brokerage firms are heavily tilted towards the firms
4. If someone makes money once, they get motivated to invest more and more
5. People don’t understand the fact that financial markets are long term investments
6. Many people suffer losses due to their greed
7. Senior management in listed companies pass on their knowledge about company affairs to friends/family so that they could make money
8. Lack of regulations on analysts receiving gifts from corporates
9. Lack of laws against conflict of interest
10. SEBI is not vigilant enough.

Lack of Ethics in Financial Markets – Issues

1. Some brokers trade clients' instrument without clients knowledge
2. Speculation is legal name of gambling which leads to high inflation and spoils many
3. The stock exchange has become a place of betting
4. Stock markets are not considered a place of investment anymore
5. Many companies trade on the behalf of the client without their knowledge
6. The brokerage is never transparent
7. Insider trading is widely practiced and the perception is that there is nothing wrong with it
8. Brokers lure people to invest more money by promising high profits
9. Many fictitious companies manage to list on BSE and send SMS to many customers dealing in stocks asking them to buy a specific stock
10. Large amount of money laundering takes place in stock market
11. Some analysts receive cash and valuable gifts kickbacks from corporates to pump their stock. more  

View all 24 comments Below 24 comments
Financial market is captured by the speculators and foreign investmentors in good companies. more  
as told earlier,people,media,and the concern company should be punished..whether it will happen,in public sector banks itself people taken crores of rupees and not paid,tell me without any document can anybody-common man- open or take any loan from any bank.. then who has taken..where is the list,publish the list and give it to the media,why it is not been done for such a long period,if it happen by the individual whether the govt will keep mum,eg.not paid vehicle challen been sent letter and in the media,any the police are catching the people for small amount,what about these people who has not paid the loan which is been taken,people are telling there is so many people who has deposited in foreign countries,can any body -common people--know the details..who is going to bell the cat sir.. more  
Most of the Brokers have no knowledge and try to fleece investors. more  
I have only one Question..... .... is Govt or Political leaders really don't know about how to stop the corruption / how to make the corruption free country ????? more  
First catch bribe givers and punish them. Corruption will vanish in to thin air. Instead dont try to keep corruption alive with the sole intention of keeping your organisation alive. more  
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