IPO ExecutionIPO Execution I. The Market EnvironmentI. The Market Environment 3 What the Headlines SayWhat the Headlines Say Investment BanksInvestment Banks ? ? Insider Trading Insider Trading ? ? Research IndependenceResearch Independence ? ? Securities DistributionSecurities Distribution ? ? Principal vs. AdvisorPrincipal vs. Advisor ? ? Product SuitabilityProduct Suitability ? ? Risk ManagementRisk Management 4 What the Headlines SayWhat the Headlines Say ClientsClients ? ? Accounting / Financial ManipulationAccounting / Financial Manipulation ? ? Money launderingMoney laundering ? ? BriberyBribery ? ? Collusion / price fixingCollusion / price fixing ? ? Options backdatingOptions backdating ? ? Executive compensationExecutive compensation ? ? Board room spyingBoard room spying ? ? Intellectual propertyIntellectual property ? ? Product safetyProduct safety ? ? Business practicesBusiness practices ? ? Social issuesSocial issues 5 Key Issues for Investment BanksKey Issues for Investment Banks ? ? Proper use of information / Chinese WallProper use of information / Chinese Wall ? ? Managing conflicts of interestManaging conflicts of interest ? ? Due diligenceDue diligence 6 Issues of Business Ethics in PracticeIssues of Business Ethics in Practice ? ? AML, Insider Trading, BriberyAML, Insider Trading, Bribery ? ? Research independenceResearch independence ? ? Misuse of confidential informationMisuse of confidential information ? ? Product suitability and pricingProduct suitability and pricing ? ? Acting as principalActing as principal ? ? Client practicesClient practices ? ? Internal behaviorInternal behavior 7 Our ApproachOur Approach ? ? Strong CultureStrong Culture ? ? Clear Policies and ProceduresClear Policies and Procedures ? ? Training and EducationTraining and Education ? ? Rigorous OversightRigorous Oversight ? ? Reward and Strict EnforcementReward and Strict Enforcement 8 ? ? #4. We take great pride in the professional quality of our work#4. We take great pride in the professional quality of our work. We . We have an uncompromising have an uncompromising determination to achieve excellencedetermination to achieve excellence in in everything we undertakeeverything we undertake ? ? #6. We make an unusual effort to identify and recruit the very #6. We make an unusual effort to identify and recruit the very best best person for every job. Although our activities are measured in tperson for every job. Although our activities are measured in the he billions of dollars, billions of dollars, we select our people one by one.we select our people one by one. ? ? #7. We offer our people the opportunity to move ahead more #7. We offer our people the opportunity to move ahead more rapidly than is possible at most other places. rapidly than is possible at most other places. Advancement Advancement depends on meritdepends on merit and we have yet to find the limits to the and we have yet to find the limits to the responsibility our best people are able to assume.responsibility our best people are able to assume. ? ? #8. #8. We stress teamwork in everything we doWe stress teamwork in everything we do. While individual . While individual creativity is always encouraged, we have found that team effort creativity is always encouraged, we have found that team effort often produces the best results. We have no room for those who often produces the best results. We have no room for those who put their personal interests ahead of the interests of the firm put their personal interests ahead of the interests of the firm and its and its clients.clients. Our Business PrinciplesOur Business Principles 9 ? ? #2. Our assets are our people, capital and reputation. If any #2. Our assets are our people, capital and reputation. If any of of these is ever diminished, the last is the most difficult to restthese is ever diminished, the last is the most difficult to restore. ore. We We are dedicated to complying fully with the letter and spirit of tare dedicated to complying fully with the letter and spirit of the laws, he laws, rules and ethical principles that govern usrules and ethical principles that govern us. Our continued success . Our continued success depends upon unswerving adherence to this standard.depends upon unswerving adherence to this standard. ? ? #12. We regularly receive #12. We regularly receive confidential informationconfidential information as part of our as part of our normal client relationships. To breach a confidence or to use normal client relationships. To breach a confidence or to use confidential information improperly or carelessly would be confidential information improperly or carelessly would be unthinkable.unthinkable. ? ? #13. Our business is highly competitive, and we aggressively se#13. Our business is highly competitive, and we aggressively seek ek to expand our client relationships. However, we must always be to expand our client relationships. However, we must always be fair fair competit