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What are the ethical considerations involved in a company's decision to loan executives money to cover...

What are the ethical considerations involved in a company's decision to loan executives money to cover margin calls on their purchase of shares of company stock?

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Answer #1

Ethical considerations involved in a company's decision to loan executives money to cover margins calls:

1. If the customers are informed about the loan arrangement it will be ethical . However if the loaning process has been done without any information to customers it can be unethical.
2. The risk appetite of customers may be less and and uniformed customer may find it too risky if margin call are covered by loans.


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