Culture and ethics in finance

1.

TH
5
TERM
UNIT 1 CULTURE AND ETHICS IN
FINANCE
Prepared by Olga V.Ginzburg
Moscow, 2025

2. Course books

3. ASSESSMENT

• Max. 100 scores per term
• 20 scores (the 1st half of the term) + 20 (the 2nd half of the term) + 60
for the credit (30 (written test) + 30 (oral part).
• The first 20 points - at the beginning of November during the
assessment period. Include: 10 (test paper) + 3 (attendance) + 7 (work in
class and at home).
• The second 20 points at the end of December 3 (attendance) + 17 (work
in class and at home).

4. 3 course 5 term

• Theme 1. Business communication in a professional context. The concept of
business communication and the subject of business communication in
modern conditions– 14hours.
• Theme 2. Written forms of business communication. Business Documents. Business
Correspondence. – 14 hours.
• Theme 3. Oral forms of business communication. Public speaking and
presentations. Presenting Across Cultures. Rapport Building. Impact Techniques. –
14 hours.
• Theme 4. Negotiations. Negotiating Across Cultures. – 14 hours.
• Theme 5. Business Meetings. Managing International Meetings – 14 hours.
Mid-term assessment test – 2 hours.
Written part of the exam – 2 hours.
Oral part of the exam –– 2 hours.
Total: 68 hours.

5. Mid-term Assessment Test

• Listening 10–15 tasks (5 scores),
• Lexico-grammatical test 30 tasks (3 points),
• Written task (business e-mails) –120-150 words (3 points)
Total: 10 points

6. Exam

Written part – 2 hours:
Listening 10–15 tasks (5 points),
Lexico-grammatical test 30-40 tasks (15 points),
Writing (10 points) = 30 points
Oral part - 2 hours:
Case study/role play =30 points

7. Individual work

• Individual home reading on the topic of classwork;
• Mini-reports on the material you have read (3 min). 2 students per 1
lesson;
• Glossaries of terms and word collocations on the material you have
read. Students present the glossaries; the teacher asks the terms and
collocations from the glossary.

8. Theme1 Sample Topics for reports

The role and place of business communication in a person's professional
activity.
• “The Art of Crossing Cultures” by Craig Storti (review of the book).
• Small-talks at the work place.
• Business Etiquette.
• Various forms of business communication.
• National peculiarities of business communication.
• The causes of communicative failures.
• Cross-cultural differences and international business etiquette of different
countries.
• Strategy and tactics of business communication depending on the cultural and
national characteristics of the audience.

9. Theme 2. Business Correspondence. Types of Business e-mails.

• Structural and communicative peculiarities and language features
of business documents.
• Types of business e-mails.

10. Theme 3. Presenting Across Cultures.

• Mechanisms of influence.
• Samples of persuasive speeches.
• Rules for composing persuasive speeches.

11. Theme 4. Negotiating Across Cultures.

• Types of negotiations.
• Negotiation tactics.
• Rules of effective argumentation.
• Types of arguments.

12. Theme 5. Business Meetings.

• Types and classification of business meetings.
• Preparation, organization and holding of business meetings.
• Stages and technologies of conducting a business meeting.
• Effective information exchange and communication channels.
• Ways of maintaining the audience's attention.
• Feedback: meaning, importance, process and types.
• Conflicts and stresses in business communication.

13. Assessment

Attendance – 3 scores
7 scores
home tasks – 3,5
class work – 3,5
Home tasks 3,5 scores
1.Summary – 0,5
2. Group presentation – 1,5
3. Monologues – 0,5
4.Writing – 1
5. Additional tasks – 0,5
Class work 3,5 scores
1. Role plays/dialogues – 0,5
2. Case study - 0,5
3. Additional tasks – 0,5

14. p.6-7

Ethics =professional/business/medical ethics (=the moral rules relating to a
particular profession)
Morality = beliefs or ideas about what is right and wrong and about how
people should behave

15. Allusions from the text p. 7-9

1. Enron scandal
2. Sarbanes-Oxley Act
3. Auditor Arthur Andersen
4. Solomon Brothers
5. World Com

16. Video (1) Enron Scandal

Enron Accounting Scandal Explained! A Frequent Accounting Interview
Question! – YouTube
https://www.youtube.com/watch?v=NvslpOUDaHo

17. Vocabulary on the video (1)

A blueprint = plan
To garner = get
Artist = designer, painter
Infamous
The market underwent significant deregulation throughout the 80s and 90s
False estimations of the new assets value
SPV=a special purpose vehicle (SPV) is a subsidiary legal entity created by a parent
company (subsidiaries) to isolate the financial risk of certain assets, projects, or
ventures.
Dot-com bubble =the dotcom bubble was a rapid rise in U.S. equity valuations fueled by
investments in Internet-based companies during the bull market in the late 1990s.
Financial statement = is a document that summarizes an individual or
business's financial position, including assets, liabilities, and net worth. It is
used to assess the financial health of an individual or business.

18.

Scaling vs growth
Business scaling refers to the strategic and sustainable growth of your business so that
your productivity and revenue exceed the cost. It means having the ability to grow
without being hampered.
The SEC = Securities and Exchange Commission
To overstate the profit = overestimate, make higher
Off-balance sheet debt =
To file for bankruptcy =
Nefarious activity = dangerous, dishonest, mean
Pleaded not guilty =
He served 12 years before being released =
Compliance in the fraud =
To sight off financial reports =

19. Questions on the Video (1)

1. What was Enron's annual revenue at its peak?
2. Who designed the Enron logo?3
3. What is mark-to-market accounting?
4. How did Enron hide its losses?5
5. What were Enron's SPV's?6
6. What caused Enron's first quarterly loss in 4 years?7
7. When did Enron file for bankruptcy protection?8
8. How much did shareholders win in their lawsuit against banks?9
9. Who went on trial for charges related to Enron's scandal?10
10.What were the consequences of Enron's bankruptcy?
11.What is the Sarbanes-Oxley Act and what did it create?’
12.Who is Arthur Andersen?

20. Video (2)

The Collapse of Lehman Brothers - A Simple Overview – YouTube
https://www.youtube.com/watch?v=ORuTUATFd-E&t=15s
1. What was Warren Buffett's initial stance on investment bankers?
2. How did Warren and Charlie feel about the culture at Solomon Brothers?
3. How did they manage to exceed the limits of trading in government
bonds?
4. When did the scandal at Solomon Brothers occur?4
5. Who did Warren meet with after the scandal broke out?5
6. What did the Federal Reserve of New York tell Warren?6
7. What did the U.S. Treasury Department do to Solomon Brothers?7
8. What was Warren's reputation on the line for?
9. Why did Warren step in as interim chairman of Solomon Brothers?
10. What did Warren have to convince the Treasury of?0

21. Vocabulary on Video 2

Integrity of financial institutions
Improper trading of treasury bonds
A Treasury Bond (or T-bond) is a government debt security with a fixed rate of
return and relatively low risk as the US government issues it. One can buy
treasury bonds directly from the US Treasury or through a bank, broker, or
mutual fund company. These are long-term bonds investors use to fulfill their
financial goals through safe investments.
To exceed the limit of trading in government bonds
Federal reserve (Fed) = the central banking system of the United States.
The SEC =
the justice department= executive division of the U.S. federal government
responsible for law enforcement

22.

Staggering = too great
Suspend from participating in the auction
To battle out = leave without struggling
Was elected interim chairman = temporary
Death knell
Endorsement = support
Lose a shred of reputation for the firm and I will be ruthless.

23. Enron. The Biggest Fraud in history

1. What made Enron
special? Why was it
the biggest scam?
• Far smarter
• Intricate and complex
• A big scam
• Political manipulation
• Dozens of convictions
• Corporate greed
• trading
• Making energy deals in power
• Moving on to broadband
• Be well connected politically
• Contributor to the president’s campaign

24. Enron. The Biggest Fraud in history

2.Who founded Enron? What
helped him in his career?
• A priest
• To ponder about
• Escape the current conditions
• A prominent figure in
• Deregulate the energy sector
• PhD
• The Pentagon
• These favours didn’t go unreturned

25. Enron. The Biggest Fraud in history

3. The Valhalla Scandal
• The year of ….
• Gamble enormously
• On smb’s behalf
• Instead of firing the rogue traders
• Convicted of fraud
• Be aware of their reckless gambling
and theft
• As revealed later
• Money makers
• Behind bars
• To bring in cash

26. Enron. The Biggest Fraud in history

4. Who is Jeffrey
Skilling? Why was he
the most valuable
asset?
• Gas supply company
• A stock market for natural gas
• to mark to market accounting,
• to fraudulently reap billions.

27. Enron. The Biggest Fraud in history

• to write down profits in their books on the day that
the deal was signed.
5. How did they
cook books?
What instincts
did Skilling want
to unlock?
• The deal fell through
• Darwinian philosophy
• Survival of the fittest
• The selfish gene
• Grading the employees on scale
• To be fired
• Ruthless in their effort
• A massive risk taker
• Dirt biking on dangerous trails
• Flip cars
• Require stiches
• With a bit of edge

28. Enron. The Biggest Fraud in history

6. Who is Lou Pai?
What was his role in
Enron?
• Mild-mannered
• ICBM
• A subsidiary
• Escaped the whole scandal pretty
much intact
• A few decades after the dust settles

29. Enron. The Biggest Fraud in history

7. The dotcom boom and Enron
• Transparent marketplace
• Dark blind systems that existed
• The stock had tripled in the space of
two years
• Spare cash
• Paly the stock market game
• Meet or exceed the endless
expectations that the stock price
would keep rising
• Stood at the company’s conventions
• The site lay in ruins
• Handle themselves massive bonuses
• Fell under the spell of skilling
• Take him at his word

30. Enron. The Biggest Fraud in history

8. What does it mean that
“Enron began trading
weather”?
• Trade bandwidth
• Skeptical
• Most innovative companies
• Demise

31. Enron. The Biggest Fraud in history

9. LJM and its role + bankers
10. Merrill Lynch
• CFO
• Andy Foster
• Poring over documents
• Have no moral compass
• A fraudulent firm
• to be in on the deal
• A barge
• To help cook the books

32. Enron. The Biggest Fraud in history

11. Enron in California
12. Why didn’t the state
government stop activities of
Enron?
• Increasingly volatile
• To keep making quarterly targets
• To merge
• Access to the Caifornia Grid
• Rolling blackouts
• Double the capacilty
• Tolls
• Were high-fiving themselves over their bonuses
• The year-long ordeal
• the president refused to step in
• Intervention would not solve anything
• The Federal Energy Regulation Commission
• To turn on the governor

33. Enron. The Biggest Fraud in history

13. What did the fall of Enron
start with?
• Out of the blue
• To resign/resignation
• Implode
• Staggering amount of corruption
• The SEC would launch an informal inquiry
• To shred documents

34. Enron. The Biggest Fraud in history

14. What did Enron do with
Shareholders?
• Bring calm and reassurance to
investors
• Redo things
• In the interest of shareholders
• Who held Enron stock
• The market was frozen
• A fire sale of stock

35. Enron. The Biggest Fraud in history

15. What was the outcome?
• Criminal investigations were launched
• Cashed in 30$ million from Enron
• To testify in court
• Pleaded guilty to conspiracy to commit wire fraud
• He rattered out and cut himself a deal to testify against other Enron executives.
• He was sentenced to 10 years, but only served six
• paid 23 million in fines.
• convicted of obstructing justice.
• collapsed due to the loss of reputation.
• was found guilty of 10 counts, a securities fraud, and was facing 45 years in prison
• lost their jobs and medical insurance, with an average severance pay of only
$4,500.
• Executives were paid $55 million during the bankruptcy and cashed a further $774
million in the year before the collapse.
• While in jail, his parents and his son passed away.
• He only served 12 years of his 24 year sentence and was released in early 2019,
• to be plotting a return to the energy sector.
• Sailed off into the sunset
• To start a new venture
• His reputation has been smeared

36. GRAMMAR. The Plural of Compound Nouns

1.If in a compound noun there is only one noun stem, put that noun in the
plural: e.g. a passer-by -- passers-by
a looker-on – lookers-on
an Englishman – Englishmen
(Note: Such words as "Norman, Roman, German" have the plurals "Normans,
Romans, Germans", since they are not compounds.)
2.
If in a compound noun there is no noun stem, add the suffix -s to its end:
e.g. a forget-me-not – forget-me-nots
a hold-all "хозяйственная сумка" – hold-alls
a stand-by – stand-bys
a hair-do – hair-dos

37. The Plural of Compound Nouns (2)

3.
If in a compound noun there are more than one noun stems, put
the head stem in the plural
e.g. a story-teller – story-tellers
a man-of-war – men-of-war
an editor-in-chief – editors-in-chief
a brother-in-law – brothers-in-law
But: a son-of-a-bitch – sons-of-bitches, son-of-bitches
4.
In some compound nouns both noun stems may be changed
e.g. a woman doctor – women doctors
a lord-justice "судья апелляционного суда" – lords-justices
a gentleman-farmer – gentlemen-farmers

38. The Plural of Compound Nouns (3)

5.
Some compound nouns have two plural forms:
e.g. an attorney-general "министр юстиции" – attorneys-general,
attorney-generals.
a court-martial – courts-martial, court-martials
a cousin-german – cousins-german, cousin-germans
mouthful – mouthfuls, mouthsful, mouths full
spoonful – spoonfuls, spoonsful, spoons full

39. The Plural of Compound Nouns (4)

6.
One must be especially careful about French compound words.
They are numerous and their pronunciation is hard to predict. Sometimes
it can depend on the dictionary the word is registered in.
e.g. a) aide-de-camp [eiddə'ka:n] – aides-de-camp (same
pronunciation)
coup d'état [ku: dei'ta:] – coups d'état (same pronunciation)
chef d'oevre [∫ei'dəvre] -- chefs d'oevre (same pronunciation)
b)
nouveau riche [nu:vəu 'ri:∫] – nouveaux riches (same pronunciation)
enfant terrible [onfante'ri:ble] – enfants terribles (same pronunciation)
filet mignon [fi'lei min'jon] – filets mignons (same pronunciation)
c) hors d'oevre [o:'dəv] – hors d'oevres (same pronunciation)

40. The WorldCom Scandal

https://www.youtube.com/watch?v=z-MDKJ-ZyrI

41. The WorldCom Scandal Vocabulary

AT&T. Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown
Dallas, Texas. It is the world's third-largest telecommunications company by revenue and the second-largest wireless carrier in
the United States.
long distance provider
LDDS= Long Distance Discount Dervices INC.
filed for bankruptcy = declare
investing under false figures
To disassemble = to separate something into its different parts
a means of entering the international market = a way
To sprint = to run as fast as you can over a short distance, either in a race or because you are in a great hurry to get
somewhere
Jot down the journal entries = to write something quickly on a piece of paper so that you remember it:
To capitalize = in accounting to include part of the money spent on equipment, buildings, etc. as an asset in your accounts
each year over a period of years
Depreciation = loss of value, especially over time
Margin call = a demand to increase the amount of money or assets in a margin account because it has fallen below the lowest
amount allowed
a bond = an official paper given by the government or a company to show that you have lent them money that they will pay
back to you at a particular interest rate
issued a civil penalty

42. The WorldCom Scandal Questions

1. What are the similarities between Enron and World.com?
2. What caused a new wave of competition in the market?
3. What was the strategy of World.com in the 1980s?
4. What was a means of entering the international market?
5. Why was is the acquisition of MCI an insane deal? How much did it cost?
6. When did the fraudulent actions start?
7. What did they do to raise earnings?
8. Who is Bernie Ebbers? Why did he keep the stock price up?
9. What was the name of Worldcom after the bankruptcy?