My short bio: Hi, I'm Rupini Rajagopalan and I'm a Doctoral Researcher of Finance at the ICMA Centre, Henley Business School, University of Reading in the UK. My research interest has been in the area of Ethics and Finance since 2013 and I was invited to speak at the PRI Research, Innovation and Stewardship in Responsible Investment event in 2015. My current research ties extremely close to scandals as I am researching on the impact of companies that are fined for illegal behaviours on the financial market. I also taught a session “Fines reported to the SEC: An exponentially growing problem?” at the Financial Conduct Authority as part of the MSc in Financial Regulation. Coming previously from a consulting and investment banking background, I provide not only an academic view point but also a professional yet somewhat 'all-round' view. I believe that at this time and age, companies ought to 'do and be' good to society and not consider it an option.

I'll be joined later by my PhD supervisor Dr Andreas Hoepner.

Dr Hoepner is an Associate Professor of Finance at the ICMA Centre, Henley Business School. He has been researching in the area of Ethics and Finance since 2006 and was invited in 2015 to the Royal Society of Arts for "exceptional contributions to the study of finance, particularly ... responsible investment". During his career so far, he has been working on topics of ethics and finance with the United Nations supported Principles for Responsible Investment, International Finance Corporation (IFC), the University of Cambridge’s Institute for Sustainability Leadership and the University of Oxford’s Moller Centre. He believes that transparency is a MUST in the 21st century with its ever increasing number of 'leaks'. Anyone should also consider that society's moral compass is constantly shifting and judges with assess on the morals at the time of hearing not the time of conduct.

My Proof: University of Reading on Twitter and the ICMA Centre where I teach and study

Edit: More proof, me outside the ICMA Centre

Edit 2: Proof for Dr Andreas Hoepner who will be joining later: ICMA Centre on Twitter where Andreas teaches

Comments: 107 • Responses: 38  • Date: 

daryltry16 karma

Isn't this less about ethics in finance and more about the lack of integrity of politicians?

Rupini-ICMA15 karma

Good question. I think it is to do with ethics and finance, and how people use finance to help themselves, sometimes at the detriment of others. If politicians use shell companies to hide their dealings, then this of course effects their integrity, but it is also other non-political individuals that are implicated in this scandal. A good example is the US book writer (I can't remember her name right now!)

So to answer to answer your question, in many ways it is about both ethics in finance and the integrity of politicians, but it is not just limited to politicians! There is a need for more transparency no matter what, and the push should come from politicians. Only then can there be ethics in finance.

C0rnerst0ne10 karma

To your knowledge, do you think some people use offshore accounts and shell companies for legitimate reasons?

Rupini-ICMA6 karma

Yes of course, the main purpose of having an off shore shell company can be for legitimate purposes, such as start ups, or even as holding companies.

OmegaSpoon9 karma

What is the best thing for the average person about the Panama Papers?

Rupini-ICMA11 karma

It shows us what many of us have suspected for a long time, although it is still surprising at the scale of such corruption. The benefit to the average person (hopefully) is that these people will no longer be able to hide behind complex and elitist structures, and there will always be someone there to catch them.

FedEx_Potatoes5 karma

Does the possible amount of tax being evaded over these years had any serious contributions to the weakening of the economy?

Rupini-ICMA4 karma

AH: It seriously weakens the evaded economies and seriously strengthens the economies of the tax havens :)

1tudore5 karma

Vox posted an article posited that shell corporations could be used by dissidents trying to avoid persecution of authoritarian governments.

Are there any examples of someone actually using shell corporations this way? If so, has it happened enough to off-set the more common abuses associated with shell corporations?

If not, could we absolutely prevent the creation of shell corporations without negative consequences? If not, what would those negative consequences be and how could we mitigate/avoid them?

Rupini-ICMA6 karma

It should be possible to prevent the creation of shell companies that have illegal business transactions. It just boils down to the people who are knowingly creating them. This then relates to the whole ethics issue around finance - if you know it's bad, then why do it? Of course if regulation is stringent, it will give more incentive for people or companies to do the right thing. If the penalties were higher, and even perhaps the inclusion of jail sentences, then perhaps people may be deterred from creating illegal shell corporations.

lkacr4 karma

Regarding the Panama Papers release; I am getting the feeling of more finger pointing that actual accusations with a few exceptions. I am trying to comprehend if this is all SO gray that that is all they can do, if they are just up to their necks in documents and have not been able to make the final connections, or what? When I first heard of this I really thought it was going to be a much bigger bombshell. Was I just wrong, or am I naive to the gravity.

Rupini-ICMA5 karma

With the large scale of the documents, as reporters were looking at it, they of course would firstly target "VIP" names. But what is more important is that the documents itself does not just indicate finger pointing but actual proof! Hence, these accusations were turned into real evidence. The final connections were made in some cases, especially on President Putin, as his fellow friend and musician had accounts in Panama with millions of dollars (I don't know the exact sum). This is a huge deal, as everyone has reacted to it even President Obama. However, we have yet to see the real impact of the issue. This could lead to regulation change stopping businesses from hiding revenue away, which would be a hugely positive outcome!

fabulameo4 karma

Hi! Wikileaks is asking for the ICIJ to release all the leaked documents to the public for them to freely go through. What is your opinion on this coming from an ethical and financial perspective?

Rupini-ICMA2 karma

AH: yes please

turtur2 karma

Do you consider the use of offshore comapanies per se unethical or can you imagine reasonable legitimate uses for them?

edit/ What is you take on the uneven geographical distribution of account holders; i.e. the fact that so far no US citizens have been implicated.

Rupini-ICMA1 karma

AH: There is legal use for them though I find it hard to consider this 100% ethical

Rupini-ICMA2 karma

Hi everyone,

Thank you so much for all of your questions! I wish I could stay longer, I have to go now but my supervisor u/Andreas-ICMA is hoping to answer questions later this evening/tomorrow morning (UK time). Please continue to ask your questions and we will do our best to answer them for you!

In the meantime, if you're interested in the topic of Ethics in Finance (like I am) the ICMA Centre at University of Reading has a few modules in our masters courses that explore this (some of which I teach!)

Thanks again for your questions - reply to let me know if you would like us to set up another AMA about this!


scarman92-1 karma

you seriously made an iama as a random person and only answered 10 questions. the fuck?

Rupini-ICMA3 karma

Hello, there was a previous thread that I was answering questions in for an hour before this one, but unfortunately it was shut down by mods as we didn't provide proof for my supervisor. I tried to get to every question that was asked within the 2-hour time period I was available (3-5pm GMT). As I mentioned above, my supervisor u/Andreas-ICMA is hoping to answer questions this morning.

mberre2 karma

Hi there,

  • How exactly is "Responsible Investment" being defined in your research? How is it being quantified?

  • In your professional view, how is the regulatory environment (and the transparency environment) likely to change as a result of this?

Rupini-ICMA5 karma

I will leave this one to my supervisor u/Andreas-ICMA - as he's the responsible investment guru!

Edit: He'll be joining the discussion later

Rupini-ICMA1 karma

AH: Please see for a common definition

1tudore2 karma

I am very interested in learning more about public policy, but I don't know where to begin when it comes to finance and financial regulation.

What is the policy conversation around the salient financial issues of the Panama Papers? Like, what is the left/right, authoritarian/libertarian response?

What think tanks or white papers would you suggest someone read if they wanted to survey the field of possible responses?

Rupini-ICMA4 karma

I think the policy conversation is more of a political one than ethics and finance, so it is hard for me to say about that - sorry! However, I will check with my supervisor u/Andreas-ICMA to see if he can advise of any white papers that could help. (he will be taking over from me later on)

1tudore1 karma


1tudore2 karma

What financial literacy resources would you recommend for someone with no financial background who wants to grasp the salient issues at exposed by the Panama Papers?

Rupini-ICMA8 karma

I would say, a really good starting point would be to read the Süddeutsche Zeitung - this is the newspaper that initially reported and coordinated the leak. They have a good one-pager explaining the full extent of the Panama Papers leak (and a video too).

TalentedPleb2 karma

Do you believe this is only scratching the surface of the level of corruption, given how many off-shore companies there are. Or do you think these papers will have a significant affect on reducing corruption in the world?

I've been speaking with some friends and we believe that this won't actually change much and may well be completely ignored by the media in the coming fortnight. Do you have any opinions on this?

Rupini-ICMA1 karma

AH: If any countries that does not have 'One Profit Principle' such as US and UK introduces it, this would help a lot

SpookySkelly2221 karma

Just copy and pasted what I asked in /r/PanamaPapers Written laws are like spiders’ webs; they will catch, it is true, the weak and poor, but would be torn in pieces by the rich and powerful. - Anacharsis Do you agree to this quote? If so, what do you think would be the best remedy? Should we enforce ethics "morally" (like shaming a person or honoring people who do good) or do something more tangible like passing and enforcing laws that target the rich and powerful? Also another quote though I've lost the source, but it goes to the effect that "hacking is the peoples' weapon against the corrupt". Do you agree to this? Does it validate hacking as a means to deliver justice? Do the people need to resort to underhanded methods in order to fight back, like revolutions, assassinations, hacking, etc... as what previously happens in history? Thanks for doing this AMA. :) I was deeply disturbed but at the same time not surprised when this all broke out. Hope Unaoil doesn't go forgotten because of this.

Rupini-ICMA1 karma

AH: offshore firms are indeed only for those who can afford them. Hackers ethics will impact the 21st century more than the ethics of most other groups of society. Hackers are in this sense the avantgarde of the millennials although illegal action can never be endorsed

darexinfinity1 karma

Hi u/Andreas-ICMA, are you aware of what government justice organizations will do to the companies once they've obtained this data? Also what realistic punishments can be served to the parties involved in this?

Rupini-ICMA1 karma

AH: As long as the worst that can happen to companies are fines, enforcement is insufficient

pixxel51 karma

So... banks or even private individuals listed in the PP were already previously fined, and that fining them didn't stop them from doing illegal activities.

Do you think the current legal system for prosecuting and punishing this activity, once uncovered, is adequate for dealing with them?

I myself find it difficult to believe when a Bank potentially makes over a billion in off-shore dealings, and then only gets fined a measly couple of million.

But I would like to hear what you as someone who likely has spent MUCH more time dealing with this thinks...

Rupini-ICMA2 karma

A: Neither the legal systems nor the enforcement is 100% adequate

ranOutOfUsernamesUgh1 karma

Hi, I'm not sure if this is considered off topic, it's not about the Panama Papers, but it's about investing ethically.

I've just started earning enough to consider investing to grow my wealth, but I have always wanted to do so ethically. Needless to say, I will be staying away from sinful stocks, and also read up on past ethical breaches/scandals that have happened to the companies.

However, what I've seen so far has almost always been unethical practices on a widespread scale.

E.g. Widespread abuse of garment workers in the fashion industry, disregard for factory workers in the tech industry, price gouging of drugs by pharma companies, unfair and unethical practices in underwriting by insurance companies, oil companies covering up the fact that they knew about the harmful effects their activities have on the environment, etc I can go on but you get the gist.

It seems like the more I read up on these, the more it feels like companies have 'no choice' but to cut costs (at all other 'intangible' costs), increase their revenue by jacking up prices to unfair levels or market things in ways that make people overconsume more than what they really need, if they want to stay profitable.

Is cost cutting and overconsumption a must for a company to survive/stay competitive? Is the entire stock market run on unethical consumerism?

How do I know that a company I invest in is truly ethical if it's so easy to cover up for unethical practices?

Thanks for taking the time to read this.

Rupini-ICMA1 karma

Try for some seriously ethical efforts. Since ethics are subjective, you might still agree here and there but these guys do CARE

rnbwpnt1 karma

What ethics in finance?

Rupini-ICMA1 karma

Big question! There are two things to consider here; ethics and morality. In basic terms, ethics is a structured way of doing "good" (e.g. having investments that help environmental, social, and governance). Morality on the other hand is something innate and very personal and so harder to define (e.g. is it right to invest in "sin stocks" like gambling and alcohol?)

In my opinion, in any subject it is always important to consider consider the ethical implications of one's actions. I believe this is of particular importance in finance, which involves large sums of money. I feel that ethics and responsible investment comes hand in hand, and I'm happy to be able to study this at the ICMA Centre (which has a large number of students currently researching this area).

AutoModerator1 karma

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Rupini-ICMA7 karma

Hello, the previous post was hidden as we didn't provide proof for my supervisor - we've now corrected this and linked to a Twitter post from the university where he teaches. I hope this is okay, please let me know if not. We hope to get a photo proof of him when he's available.

Butt-Sprinkles1 karma

Boxers or Briefs? This is a very important question.

Rupini-ICMA1 karma

AH: Butt or Head?

God_King_Xerxes1 karma

What are some things that we as citizens can do to help fix this situation? And what can those of us who aspire to be political (run for office, active in campaigns, part of government, etc) do to address similar situations?

Rupini-ICMA1 karma

AH: invest responsibly!

therocketofpoop1 karma

Other than leaks of internal documents by whistle-blowers, is it possible for regulators to trace shell/shelf/offshore/tax-haven companies with existing laws (in whichever jurisdiction you are familiar with) as they are?

Should the practice of setting up these institutions even be legal?

Rupini-ICMA2 karma

AH: Financial Data Science can provide very good estimations

Hallidyne1 karma

Assuming a positive response by the governments of the world regarding the Panama Papers fiasco, how likely is it that governments will be able to truly prevent their constituents from using tax loopholes in the future? Also, what does it say about the four larger firms that have reputations as tax havens?

Rupini-ICMA1 karma

it's quite easy to fix the biggest aspects of tax evasion. Just introduce 'Massgeblichkeits' Principle in US and UK so companies pay taxes on the profit they report to investors not on the much smaller profit they report to tax authorities

Ration_Pack_71 karma

Just how screwed are these world leaders who are involved in it?

Rupini-ICMA1 karma

AH: Depends on the individual

NoTimeForInfinity1 karma

Is anyone using Block Chain technology to make finance more just and transparent?

Do you think governments should spearhead this process?

Rupini-ICMA2 karma

AH: Yes, they should and certainly will in the next decades

TechnicallyITsCoffee1 karma

I know plenty of people who write off business expenses that aren't expenses. Say going out for dinner with friends, they'll write it off as a dinner with a client, etc. Is this essentially the same thing as the panama papers except to a smaller scale.

People hate taxes, should we not ostracize regular joes cheating the tax system in a similar way?

Everytime you cheat the tax system I pay more to make the budget work.

Rupini-ICMA1 karma

AH: Enforcement resources are limited. It's most effective to start at the BIG scale things and then proceed to small scale matters

froahay1 karma

Regarding the course on SEC fines --

When large investment banks actually do have to pay fines to the SEC or FINRA, isn't this practically paying bribes to the SEC? The fines are never larger than the amount of money that had been made by the institution using their illegal tactics. A company, for instance, might have to pay a fine for illegal activity that occurred within known a two-month window. Their tactics, however, had been employed for years prior to this window for which they are being fined.

Rupini-ICMA1 karma

AH: No, the lobby firms are the ones "sweat talking" the authorities. Fines are truly penalties

W0LF_JK1 karma

Do you foresee implications for the US financial market due to the Panama Papers coming to light.

Also how does this effect the discussion of tax reform?

P.s. Thanks for the time!

Rupini-ICMA1 karma

AH: US newspapers barely reported. So this is lesser of a US issue

j0m1n1n1 karma

Did the FTA make the crimes described in the Panama Papers easier?

Rupini-ICMA1 karma

AH: in which regard?

brokengears6761 karma

How stringent are US laws when it comes to tax evasion and are these laws usually enforced by the government when firms conduct these activities?

Rupini-ICMA1 karma

AH: More stringent that UK laws. US Virgin Islands are quite different from British Virgin Islands

Hav3_Y0u_M3t_T3d1 karma

As massive as this leak may be, the general consensus seems to be that this is just the tip of the in this is just one law firm of there any validity to this claim and is there any route for investigators to root out these havens?

Rupini-ICMA1 karma

AH: You might want to ask computer scientists re this ;)

WBuffalo1 karma

Is there anything automatically illegal or unethical about having an offshore account? What line(s) must be crossed to make it illegal?

Rupini-ICMA1 karma

AH: Legality depends on the home countries' disclosure and tax laws. It is hard to find a definition of ethics though in which tax avoidance even if legal is 100% ethical

SurfaceBeneath1 karma

Hopefully you are still open to questions!

Given that transparency and accountability are essential to sustainable economies and government funding, do you feel that the anonymity offered by shell companies like these are detrimental overall?

To expand upon that.

Well tax avoidance is "legal", is it not unethical?

Is it reasonable to believe success carries with it a "debt" to society? (Companies and individuals should be paying their fair share of taxes for the benefit of society as a whole.)

Thanks for taking the time to answer our questions!

Rupini-ICMA1 karma

AH: Tax avoidance cannot be 100% ethical, can it ;)

mcgillycuddy4120 karma

Hi! Hope you're doing well.

How does this compare to the LIBOR scandal? Can we expect large fines and jail time for the people involved at the end of this, or just some laws? Also, still comparing it to LIBOR, do you think the Panama Papers will be "swept under the rug" by the media in the same way that LIBOR was?

Rupini-ICMA2 karma

AH: Both huge scandals, Panama probably bigger globally

LoveSignMasterSpark-5 karma

How much funding did George Soros give your employer?

Rupini-ICMA1 karma

AH: None.