Case Competitions Drive Business Ethics at Isenberg

In April, a team of five Isenberg undergraduates won first place in the annual International Business Ethics Case (IBECC) competition’s main undergraduate event.  This year’s three-day competition, at the Marriott Copley Place Hotel in Boston, attracted 28 undergraduate teams from five countries. (Graduate programs also vied in their own division. An Isenberg MBA team placed second in a 90-second competition in that division.)  For the main undergraduate event, each team devised its own case topic for legal, financial, and ethical dissection.

In their winning  presentation, Isenberg’s team—Patrick Bannon ’18, Zachary Gross ’18, Noah Gelman ’20, Nicholas Goetz ’20, and Luke Norton ’20—explored “Adapting to the Crypto Environment: Should J.P. Morgan Establish a Cryptocurrency Trading Desk?”* Credit also goes to the team’s faculty advisor, Department of Management Senior Law Lecturer Jennifer Merton. Along with its recommendations for J.P. Morgan, the team surveyed cryptocurrency and trading basics, regulatory and stakeholder perspectives, and ethical dilemmas. Following its 20-minute presentation, the Isenberg quintet fielded questions from a panel of judges.

In their argument, the students identified key ethical issues: How do you prevent tax evasion and insider trading in an unregulated environment? How do you balance anonymity’s positives of privacy and spending freedom with black market and hard-to-track activities? How do you reconcile investor value with risks involving nontransparency and volatility? J.P. Morgan, the students concluded, should open a cryptocurrency trading desk. The firm should offer customers that innovative technology—a technology that will factor into financial markets for generations to come.  At the same time, the firm would gain influence and input into accompanying regulatory change, including future legislation.  

Isenberg Does the Right Thing

Business offers a wealth of ethics-related issues, emphasizes Professor Merton. Apart from their critical value to business and society, ethics-focused challenges, notes Merton, frequently call for analytical prowess, including nuanced thinking and skill in negotiating tradeoffs. “At Isenberg, our Introduction to Business Law course has been the principal classroom vehicle for ethics-focused problem solving,” she remarks. “Other courses incorporate them as well, but Business Law address them head-on.”

To foster student engagement with business ethics, Merton has introduced an annual series of hands-on challenges. Now in its second year, the sequence begins during the fall semester with Isenberg’s own in-house ethics competition. After a morning of workshops and panels surveying ethical issues and case strategies and skills, student teams compete in a case under the auspices of two faculty and two alumni judges.  Last November’s competition, which explored sexual harassment, yielded two winning teams. At the end of the competition, Merton invited the contest’s top four teams to reconfigure for the Inter-Collegiate Business Competition in Kingston, Ontario and the IBCC competition in Boston.

Keeping Current on Cryptocurrencies

For the IBEC competition, Isenberg’s winning team researched cryptocurrencies and blockchains from soup to nuts. With guidance from Merton, the team gained familiarity with cryptocurrencies and blockchain verification, public/private keys, mining, and other essentials. They examined criminal statutes and related legal and ethical terrain. And they honed their understanding at a two-part Isenberg speaker series, organized by Merton. In the first event, Isenberg accounting graduate Ryan Salame ’15 gave students a guided tour of cryptocurrency basics from a trader’s perspective. After his lecture, Salame, a financial analyst with the Boston-based cryptocurrency trader, Circle, met with team members.

Two weeks later, Andrew Bellak and Gavin Andresen surveyed cryptocurrency issues in their conversation, The Ethics of Cryptocurrencies. Bellak is cofounder of the Amherst-based investment firm, Stakeholder's Capital; Andresen was a key developer of Bitcoin, who worked on its code with the elusive Satoshi Nakamoto. “Whenever I think about the ethics of currency, I ask, is it transparent and open?” Andresen remarked. Bitcoin is an open, honest system, he noted, because everyone can verify and enumerate the quantity of created bitcoins and their transactions.

Bitcoin is “pseudo anonymous,” added Bellak. Storing a record of your illegal activity on a global database that never gets erased is less than foolproof for the criminally inclined. The currency offers less privacy than cash but more privacy than credit cards. On the other hand, cryptocurrencies like Zcash offer greater privacy. “Should financial organizations be that private? Is that ethical?” he asked. A $10M bank transaction might raise red flags, but no one would know about the same exchange with a cryptocurrency like Zcash, he cautioned.

Without question, insights from the three visitors and painstaking research contributed to the Isenberg team’s success. Moreover, the yearlong immersion in ethical issues by Isenberg students will add value to their careers and future employers.  

*The team also included members who did not present:  Risa Kim ’20, Kavya Sebastian ’20, Nikhila Nandgopal ’18, and Nichole Moschella ’18.