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The Intersection of Law and Financial Ethics

Robert Greene once said, “Ethics and power are separate.” Money is often viewed as a cornerstone of power and a catalyst for corruption. Headlines frequently highlight instances of unethical behavior driven by financial motives. As a result, rules and regulations must be implemented to promote ethical conduct. While the code of ethics differs in each profession, ethical conduct translates the fundamental concept of right and wrong to apply to business practices. 

When it comes to financial ethics, the course of action toward ethical behavior can become complex; nuances between right and wrong must be navigated with competence and diligence. Compliance and risk management professionals deal with these grey areas.

Seattle University School of Law helps you focus your career on ethical conduct and the surrounding business practices. Our MLS in Compliance and Risk Management can be an important step on the path towards establishing the code of ethics within your organization. This blog outlines some key facets of compliance as applied to financial ethics.

Compliance in Relationships

Professional relationships happen as a natural result of working in the same circles for years on end. As compliance professionals, it is critical that you have a strong relationship with your business teams in order to ensure that there is no violation of the organization’s ethical code and related polices and procedures.

Having a foundational relationship with your team has many lasting effects. It allows you to properly train your team members awareness of the regulatory landscape that surrounds their role and informs the work that they do. It also allows you to identify any conflicts of interest that might present and resolve them. In these cases, ambiguity can easily lead to problems down the line. Clarity from the start and transparent communication is an excellent preventative measure. 

A strong relationship within the team gives you the ability to push through any important updates to regulation and address any impacts of those updates in a timely and efficient manner. Regulations can change quickly, and having plans in place to implement new updates avoids compliance issues that can arise from unpreparedness. 

 

Compliance with Regulations

Numerous industries operate under strict regulatory frameworks, including legal, healthcare, and finance. In these heavily regulated sectors, governing agencies have established comprehensive laws and regulations designed to protect consumers, ensure compliance, and maintain industry integrity.

As risk management and compliance professionals, understanding those regulations and how they interact with your job is critical. Here are some of the top finance compliance regulations that organizations have to watch out for:

  1. Gramm-Leach-Bliley Act: according to the Federal Trade Commission (FTC), “this Act passed in 1999 requires financial institutions – companies that offer consumers financial products or services like loans, financial or investment advice, or insurance – to explain their information-sharing practices to their customers and to safeguard sensitive data.”
  2. Bank Secrecy Act: According to the Internal Revenue Service (IRS), “Congress passed the Bank Secrecy Act in 1970 as the first laws to fight money laundering in the United States. The BSA requires businesses to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters.”
  3. Dodd-Frank Wall Street Reform and Consumer Protection Act: this Act, passed in 2010, was passed, “to promote financial stability of the United States by improving access and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”

Each regulation exists to protect consumers and give financial institutions long term guidelines to adhere to so as to comply with the law. They also guide businesses in best financial practices so that consumers are not led astray by any deceitful practices.  

 

Seattle University – Begin Here

Seattle University School of Law is where your educational journey begins to start your next chapter. Whether you have experience in compliance and want to further your career with specialized knowledge or are starting from the beginning, our MLS program is the university for you. We have specialized programs in not only financial compliance but health, sports, and cybersecurity. 

In addition, our MLS program is online, giving students the flexibility they need to get their degree without missing a beat in other areas of life. The added flexibility with the same plethora of resources is what makes our program an excellent fit if your career goals lie within this field. If you’re looking to work within the intersection of law and financial ethics, apply today or contact our admissions office to get started. 

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