By Father William J. Byron, SJ • Catholic News Service • Posted December 5, 2013

There are two ethical issues in the recently announced $13-billion settlement between megabank JPMorgan Chase and the U.S. Department of Justice.

The Justice Department may have to admit an ethical lapse in failing to hold Wall Street accountable for selling faulty mortgage-backed securities, a failure that led to the widespread economic crisis of 2008.

This kind of ethical failure is commonplace in personal, business and public life. Its remedy lies in competence (a professional ethical obligation to have the requisite knowledge to be able to do what you are paid to do) and responsibility (you must not permit yourself to fall asleep at the switch). Call them ignorance and inattentiveness, they are ethical issues.

JPMorgan Chase, on the other hand, has to face up to a more complicated ethical issue involving fraud, intent to injure and unjust profiteering at the expense of unsuspecting individuals and institutions on the buyers’ side of the securities market.

Buyers have a right not to be misled. Sellers have an obligation to avoid bringing defective products to market. Veracity, integrity and greed can explain the presence or absence of ethical problems in the securities markets.

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Many seasoned executives and managers will tell you that they were introduced to these ethical issues early on at the family dinner table or later in the college classroom. Some will say they learned about them on the job in conversations with men or women of character who served as role models and mentors.

Ethical conversations — i.e., conversations about ethics — are the context within which preventive strategies develop that can protect the marketplace from corruption.

The presence of corruption at any time points to the absence of ethics in conversations in earlier times on the part of men and women on their way to assuming executive or managerial responsibilities.

Or perhaps incipient positive ethical impulses picked up at the dinner table were smothered later on by the drumbeat in the dominant “me-first” corporate culture. Or perhaps word got around in the MBA classroom that the only thing that matters is shareholder value.

It is, however, never too late. Ethical conversations can begin at any time. And a good place to start — for those who may have missed it — is the 2011 report of the Financial Crisis Inquiry Commission available online at FCIC.gov. That report says simply and flatly that the crisis was avoidable: it was the result of human actions, inactions and misjudgments, and warning signs were ignored.

There they are: inattention, incompetence, greed and the absence of integrity — all ethical issues waiting to be discussed.

As I said, let the conversations begin.

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Father Byron is university professor of business and society at St. Joseph’s University, Philadelphia. Email: wbyron@sju.edu.