A. Basic Empirical Facts of the ProblemSociete Generale (SG), a famous French investment bank, suffered an unprecedented loss of 4.9 billion euros in 2008 because of a trader, Jérôme Kerviel (JK). He was accused of making unauthorized transactions and using a fake wallet to cover securities risks. This sparked a heated debate over the ethical issues surrounding the scandal. Before proceeding to investigate the ethical issues, the definition of business ethics will be reviewed first. According to Chris MacDonald (2010), a professor at Ryerson University in Toronto, business ethics is defined as a critical assessment of how people and organizations should act in the business world, particularly when their research actions profit affects others. generally two ethical issues that should be concerned.1. Individual Level – Breach of Fiduciary DutyJK breached his fiduciary duty as a trader. As a moral trader, JK must strive to pursue the best interests of his clients. Deceiving customers using the counterfeit wallet allowed JK to obtain huge bonuses while causing great harm to customers. This decision violated the aforementioned business ethics.2. Corporate Level – Blind Pursuit of Profit It is also unethical for SG to ignore JK's abnormally high trading volume until it becomes a serious problem. SG is also one of the fiduciaries responsible for managing clients' resources in their best interests. However, Kerviel reveals in his book that his practice was common among SG traders but that senior management had not taken action to prohibit it (Kerviel, 2010). This shows that SG probably aimed to achieve the greatest profits for shareholders by ignoring potential risks...... middle of paper ...... e for promotion. Therefore, companies might consider avoiding the transition of employees from compliance personnel to merchants.3. Company level – Mandatory leave for traders The third measure consists of adopting a system of compulsory leave for traders. Traders are required to take a few days of vacation at least once a year (Goldfarb, Cass & Sanati, 2008). Other staff will temporarily take over the position of merchant. This gives chances of discovering fraud since Kerviel refused to take a vacation in the scandal (Goldfarb, Cass & Sanati, 2008). By taking compulsory leave, fraud can be discovered more easily, although traders can deceive the regulatory system. However, this can reduce the efficiency of businesses as it will take time for others to catch up. Despite this, it is worth it since the consequences of lax internal control could cost up to 5 billion euros..