Ethical Dilemma in the Workplace

ETHICAL DILEMMA IN THE WORKPLACE

I recall an ethical dilemma I faced as a newly licensed Registered Representative with the brokerage firm Bellamah, Neuhauser & Barrett in the fall of 1997. I had just passed my General Securities Registered Representative Exam (the NASD Series 7). I studied for it since February and passing it meant I could open accounts and execute buy and sell orders for the investing public. Much to my dismay cold calling prospects was tough and convincing them to buy from me seemed even tougher. I talked to experienced stockbrokers at my firm who said every new broker goes through the same trials and tribulations before closing a sale on the telephone with a customer. The Series 7 Exam covered everything from the New York Stock Exchange to rules on margin accounts to National Association of Securities Dealers bylaws. However, the NASD Series 7 didn't teach a stockbroker on how to sell an intangible product over the telephone or in person. I was learning this through trial and error and it was quite a learning experience. My firm sponsored me for the exam as required by the Securities and Exchange Commission regulations. The firm was small and did not offer new trainees any salary like a New York brokerage such as Merrill Lynch or Smith Barney. I was 100% commission so I had to earn based on the amount of investment I sold and the fees applicable to the sale. Some investments offered higher payouts like a bond transaction or a mutual fund sale but my first thirty days I opened no new accounts and did not sale anything. I never missed a day and worked late but no luck. I seriously began to question my career choice as a broker.

I and my fellow new hires were discussing sales pitched between calls when our immediate supervisor came into the bullpen.

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