FEC594 – Syllabus

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FEC-594 Ethics in Financial Institutions and Financial Markets

Course syllabus .pdf


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Bülent Şenver


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Tuesday 13:00-14:00


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That financial activity be conducted ethically is of great importance, not only because of the crucial role that finance plays in the personal, economic, political, and social realms but also because of the opportunities for large financial gains, which may induce individuals and financial firms and institutions to act unethically and cause great harm. Many of the ethical standards and norms in finance are embodied in law and regulation and are enforced by the courts and regulatory bodies. Ethics plays a vital role, however, first, by guiding the formation of law and regulation and, second, by influencing conduct in areas not governed by law and regulation. Business ethics is an important part of the education of any manager, but managers with responsibility in financial markets, financial services or corporate finance are confronted with many ethical issues, which are different from those in other areas of business and require specialized understanding and treatment.


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The aim of this course is to understand the ethical issues that arise in the various areas of finance and to develop an ability to address and resolve these issues effectively and responsibly.

Specifically, the course seeks to enable managers to understand:

  • The need for ethics in finance and the role of ethics in financial activity.
  • The ethical principles of fairness in market transactions and those that justify the responsibilities and obligations of market actors.
  • The ethical principles that apply to the delivery of financial services and the operation of firms in the financial services industry.
  • The responsibilities and duties of financial managers in corporations and the ethical principles that apply to corporate financial management.
  • The ethical principles that justify corporate governance, including control of the corporation, the responsibilities and duties of corporate officers and directors, and the role of shareholders.
  • The means for managing financial firms so as to prevent misconduct and to conduct business ethically.


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%30 Mid-Term Exam
%50 Final Exam
%20 Project Paper

Extenuating circumstances for the Midterm exams

Students who miss a midterm exam shall be admitted to a midterm make-up exam only under either one of these two circumstances:

  • emergency treatments (accompanied by documentary evidence) which require an overnight stay in the hospital, including but not limited to surgeries,
  • the loss of a family member or a dependant (accompanied by documentary evidence) within the 5 days before the exam.

For circumstances other than those above, you may consult the University Infirmary for a medical report (or for the reconfirmation of your existing medical report) BEFORE or ON THE EXACT DAY OF THE RELEVANT MIDTERM.  All other reports will NOT be taken into consideration.

In these circumstances, it is the student’s responsibility to submit all relevant documents including reports (medical, traffic accident or other), lab tests and treatments if any not later than three days following the end date of the medical report to the secretary of the Department of Business Administration, Tuğçe Erdem.

Late submission of reports will not be accepted.

The reports will be evaluated by the Department Committee.

Please note that the Committee decisions are final and not subject to appeal.


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Attendance to the courses is required. Students who have a valid reason to miss a course should inform the instructor.


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Subject Assigned Chapters from PCF
Session 1

Overview of Ethics in Finance

EF 1 – 40
Session 2

Fundamentals of Finance Ethics & Major Ethical Topics

EF 40 – 59
EF 45-59
Session 3

Ethics Code & Standards of Practice of CFA

EF 172 – 182
Session 4

Ethics and the Retail Customer

EF 64 – 95
EF 78-95
EF 108-114
Session 5

Ethics and the Investment Industry

EF 96-107
EF 121-141
EF 202-211
Session 6, 7

Insider and High-Frequency Trading
Hedge Funds and Investor Activism

EF 182 – 189
EF 211-217
EF 141-148
Session 8

Hostile Takeovers and Shareholder Value

EF 189 – 201
EF  224 – 234
Session 9, 10

Bankruptcy and Corporate Governance

EF 243 – 267
Session 11

Responsible Investment and Microfinance

EF 148 – 164
Session 12, 13

Managing Risk and Reform & Case Study

EF 234 – 243


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Students are expected to come to lectures on time; punctuality is a must and is always appreciated. Cheating and is strictly forbidden; students attempting such acts will fail the course and have disciplinary action.

Honesty and trust are important to all of us as individuals. Students and faculty adhere to the following principles of academic honesty at Istanbul Bilgi University:

  1. Individual accountability for all individual work, written or oral. Copying from others or providing answers or information, written or oral, to others is cheating.
  2. Providing proper acknowledgement of original author. Copying from another student’s paper or from another text without written acknowledgement is plagiarism.
  3. Authorized Teamwork. Unauthorized help from another person or having someone else write one’s paper or assignment is collusion.


The Oxford Dictionary defines plagiarism as ‘to take and use as one’s own the thoughts, writings, or inventions of another’. All of the following are considered plagiarism: turning in someone else’s work as your own; copying words or ideas from someone else without giving credit; failing to put a quotation in quotation marks; giving incorrect information about the source of a quotation; changing words but copying the sentence structure of a source without giving credit; and copying so many words or ideas from a source that it makes up the majority of your work, whether you give credit or not. Please note that plagiarism is considered as an act of ‘fraud’ in most countries and may lead to various punitive/preventive measures including, in severe cases, expulsion. Most cases of plagiarism can be avoided, however, by citing sources. Simply acknowledging that certain material has been borrowed, and providing your audience with the information necessary to find that source, is usually enough to prevent plagiarism (this information has been ‘reproduced’ from www.plagiarism.org). For more information, see also:

David Gardner, ‘Plagiarism and How to Avoid It?’


Indiana University, ‘Plagiarism: What It is and How to Recognize and Avoid It’


University of North Carolina at Chapel Hill, ‘Plagiarism’


Cheating, plagiarism, and collusion are serious offenses resulting in failure in the relevant component of the course (F grade) and disciplinary action. Cheating, attempting to cheat and plagiarism of any kind will be officially recorded by the academic staff and reported to the Student Affairs Office which will refer the case to the relevant Faculty for disciplinary action.


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Ethics in Finance, 3rd ed., by John R. Boatright (Malden, MA: Wiley Blackwell, 2014)

Standards of Practice Handbook, Codes, Standards and Position Papers , June 2014, Vol. 2014, No. 4, 278 pages.  Source: CFA Institute