Frankie was a manager of a sneaker store for a well-known sports brand.  Recently, the brand released a highly anticipated limited-edition sneaker.  Only 1,000 pairs were produced worldwide, and Frankie’s store was only allocated two pairs per size for customers to purchase.

On launch day, fans and parallel goods traders flooded the store.  Felix, a regular parallel goods trader, informed Frankie that these sneakers could fetch up 8 times their retail price on the secondary market.  Tempted by the potential profit, Frankie began considering how to take advantage of this opportunity.

Despite the store’s policy which prohibited staff from reserving products for customers, Frankie proposed a deal to Felix.  Frankie offered to assist in reserving the limited-edition sneakers for Felix, and in return, Felix had to pay him a 30% cut of the resale profit as a rebate.  Felix gratefully accepted the offer.

Given the increasing demand of the hotel guests for local tour services, the hotel’s senior management decided to set up a consignment corner for a travel agency to deal with these requests. Janice, the hotel’s Marketing Manager, was assigned to the task.

It seemed only natural, therefore, for Janice to call Tommy, her brother-in-law, to enquire whether the travel agency he worked for would be interested.

In the midst of a recession, the performance of Tommy’s company had already been discouraging.

Hence, the pressure on Tommy, the Business Development Manager, to find a solution was intensified.  The prospect of winning the consignment corner came as a huge relief to Tommy.  He explained that this would save his career and urged Janice to grant the consignment contract to his travel agency. Believing that Tommy’s agency was as good as any other agencies and no one would discover their relationship, Janice made her decision easily.

A month later, as a token of gratitude, Tommy presented Janice a tour package to Hawaii as her birthday present.

Diana, an assistant manager at a chain fast-food restaurant, oversaw daily sales.  She misappropriated sales revenue and discount coupons for an extended period, resulting in chaotic and unclear financial records.

This situation persisted until Daisy, a newly hired cashier, noticed numerous irregularities in the restaurant's sales records.  She suspected Diana was manipulating the sales data for personal gain.  Noticing Daisy’s suspicion and to conceal her misconduct, Diana approached Daisy and promised to give Daisy 10% of the misappropriated funds if Daisy assisted in inputting false sales and coupon redemption records into the cash register system.  Daisy was caught in a dilemma as she knew this was wrong but could not resist the temptation of quick money.  Eventually, under Diana’s persistent persuasion, Daisy succumbed and agreed to help Diana conceal everything.

Although Daisy cooperated with Diana’s fraudulent activities, the chaotic and suspicious sales records eventually drew the attention of the restaurant manager.  Daisy felt uneasy about this situation and struggled with whether to reveal the truth to the manager.

Xenia was a staff member of the ticketing department of a travel agent.  Her close friend, Xaviera, worked in the sales department of an airline company.  Knowing that Xaviera was new and facing tremendous pressure to meet sales target, Xenia always encouraged her customers to purchase air tickets from Xaviera’s airline.

One day after Xaviera received a warning letter about her poor sales performance, she felt distressed and sought comfort from Xenia.  While supporting Xaviera, Xenia received a phone call from an insurance company requesting 50 air tickets for a corporate trip to a convention in Europe.   Xenia knew this would be a good opportunity to help Xaviera out of her predicament.  To secure the business, Xenia marked up prices from competing airlines when making quotations to the insurance company, steering the company toward Xaviera’s airline. As a result of the misleading pricing information provided by Xenia, the insurance company chose to book the tickets with Xaviera’s company.

Patrick, a freight manager of an airfreight company, was responsible for handling freight reservations made by forwarding companies. He became closely acquainted with Paul, the proprietor of a forwarding company.  Paul often treated Patrick to dinners at luxurious restaurants and they sometimes spent weekends playing golf together.  Because of their close relationship, Paul was confident he could always rely on Patrick for sufficient cargo space.

About a month before the Easter holiday, Paul invited Patrick to a golf trip and covered all the expenses to win him over.  During the trip, Paul casually mentioned that he had received many forwarding orders to transport goods to Europe and expected Patrick’s “usual support” regarding allocation of cargo space.  He also hinted that he would not take Patrick’s assistance for granted and would reciprocate with a 5% rebate on the freight charges.

However, shortly after the golf trip, a labour strike occurred at several airports in Europe, and Patrick’s boss took charge of the company’s contingency plan for cargo allocation.  As a result, Patrick was unable to assist Paul.

Bill was the regional manager of South East Asia in a European medical equipment manufacturer. He learnt that a medical equipment supplier in Chinese Mainland was planning to set up a company in Hong Kong to conduct bilateral business by purchasing European products through the suppliers in Hong Kong and selling wheelchairs and medical equipment made in China to South East Asia.

Bill invited the supplier to Hong Kong to have a look at the latest European medical facilities and the equipment used in hospitals in Hong Kong, as well as to get familiar with the local business environment.

Upon their arrival in Hong Kong, Bill only spent half a day visiting the hospitals with the two supplier representatives, but spent a whole week treating them to lavish meals and red wine at five star hotels and restaurants. Bill also arranged a tour to Macao, including a visit to a newly opened casino. Bill gave each of them HK$10,000 worth of casino tokens to "try their luck", claiming that it was a "trade practice" to show his hospitality to their clients. He also implied that he would offer them a handsome "red packet" if they purchase the medical equipment from his company.

Andrew was the chief accountant of a large trading company.  Due to keen competition, the business of the company deteriorated substantially.  To improve the situation, the company attempted to invest in the Mainland.

When reviewing the books and bank statements, Andrew found that there was evidence of fraudulent activities involving some sales representatives. Andrew discovered that there were no supporting documents for some cash payments claimed by the sales representatives.  When asked for explanations, the sales representatives replied that those expenses had been incurred for the purpose of building up new businesses in the Mainland.  They further explained that the offering of commission to agents of business clients was a common practice.  When consulting the Marketing Director who was a long serving staff of the company, Andrew was told that the expenses were approved by  the Marketing Director personally. 

With no choice, Andrew went to see the Vice-president.  The Vice-president pacified Andrew and told him that in real business life, the company had to tolerate some minor variations in order to get the job done.

Next day, a cheque was placed on Andrew’s desk and the phone rang.  It was the Marketing Director.  Andrew was asked to sign the cheque and was told that it would be deposited in a designated Hong Kong bank account belonging to a buyer of a firm in the Mainland.  The arrangement enabled the buyer to pay for his various expenses while on business in Hong Kong.  He further suggested that the sum could be paid by an overseas subsidiary of the company.

Although Andrew knew that the client was very important to the company, he suspected that the payment might be unlawful.

What should Andrew do?

William is a fund manager who manages a number of Asian unit trusts comprising of low stake portfolios.   Given the keen competition with his fellow fund managers in the company, he sets out to make the unit trusts in his care the star performing funds within a short period of time.

Although his clients have clearly specified a low risk mandate, William still invests a large proportion of the funds of his discretionary clients in emerging Asian countries, ignoring any warning signs of an economic downturn within the region.   He even explains to the trustees of the unit trusts that the financial hiccup in some of the countries will soon be over.   However, the financial turmoil quickly spreads across Asia causing the collapse of several stock markets.   The unit trusts under William’s management suffer a tremendous loss.

Doris  is  an  account  manager  of  a  brokerage  company.    One  day,  a white-collar worker named Kelvin steps into her company with a request to open an account to deal in securities.   He tells Doris that, as he plans to study abroad next year, he wants his savings of one hundred thousand dollars to have a good return so that he can have enough money to reach his goal early.   He asks Doris in what products he should invest.  Doris persuades Kelvin to open a margin account to buy second-line stocks.   However, Doris doesn’t try to explain to Kelvin the difference between margin accounts and cash accounts, nor the risks involved in the former.

Hearing that the Hang Seng Index is dropping rapidly soon after the opening of the stock market, Kelvin calls Doris and places the order to immediately sell all the shares in his account.   Because Doris also receives many other "sell" orders from her large clients that morning, she sets aside Kelvin’s order and busily handles their transactions.   When Doris has time to eventually execute Kelvin’s order, Kelvin has already suffered a great financial loss.

Donald is an account manager of a brokerage company and has been licensed by the Securities and Futures Commission (SFC) to deal in securities. Since his company is keen to develop the futures brokerage business and needs more manpower to handle client orders, Donald is instructed by his supervisor to apply for the related license.  In fact, his company never considers whether Donald possesses the required qualifications and experience to be so licensed.

One day, a regular customer, Gordon, seeks Donald’s advice on index options.   Although Donald has yet to obtain the license, he is confident of providing advice to Gordon because, in preparing for the license application, he obtains plenty of reference material from his colleagues in the futures brokerage division.   He even accepts the order from Gordon to buy in index options contracts.