15.S06 Fall 2015 Syllabus – Draft of 10 09 15
15.S06 – Fall 2015 H2
Core Values, Regulation and Compliance for Finance Professionals
Draft Syllabus (10/09/15)
Section 15.S06A: Bears; Thursday 6:00-7:30pm; E51-335
Section 15.S06B: Bulls; Thursday 7:30-9:00pm; E51-335
Instructors: John Akula & Leigh Hafrey
Teaching Assistant: Laurel Grassin-Drake
Overview
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The focus in 15.S06 on ”Core Values” reflects the mission of the MIT Sloan School “to develop
principled, innovative leaders who improve the world and to generate ideas that advance
management practice”, and the commitment of the Master of Finance program to “explore
crucial ethical issues impacting finance.”
During our six classes together, we address ethical and legal challenges that you will likely face
as you assume positions of responsibility and leadership in your organizations, and as you
shape your own careers. Our discussions in class will help you to situate the work you do after
graduation in the larger society. The materials we cover range from the philosophical to the
technical, with an eye to showing how values and world view affect, and in turn are affected by,
fulfillment of your daily professional obligations.
You must successfully complete “Core Values” in order to receive your Masters degree.
Attendance is mandatory and will factor significantly into your overall grade.
Prerequisites
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There are no prerequisites for this course.
Expectations of students
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*The following items assume students’ familiarity with and adherence to “Classroom
Values@MITSloan,” which we have posted to the Stellar site for 15.S06.*
Class attendance: The most important lessons in this course emerge from class discussion of,
or lectures on, assigned materials, so students must attend all classes. Sessions will begin
promptly at 6:05pm (for Bears) and 7:35pm (for Bulls). Late arrival will impact your participation
grade for that session.
Class participation: Participation is a key component to the learning experience in the course.
In order to grasp the concepts and practical engagements that form the core of 15.S06, you will
need to be able to articulate and share your thoughts with the other students in each session,
and in the assignments that derive from each class.
Written deliverables:

Team response paper: Following class 1 (Thursday 10/29), you will submit a paper of 250500 words in response to the following prompt: “Why have we chosen to work in finance,
and what role do we see ourselves performing for society?” In teams of five persons each
(created by the faculty and TA for the course), you will discuss this topic and submit your
written response by Monday 11/2, 7 pm, on Stellar.
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15.S06 Fall 2015 Syllabus – Draft of 10 09 15

Insider trading case analysis: On Thursday 11/19, at 9 pm, students will receive a short
case to analyse. Each student, working independently, will write a memo of not more than
500 words addressing certain aspects of the case and materials that we discussed in class
3. The memo will be due by Monday 11/23, 7 pm, on Stellar.

Quizzes: Classes 5 and 6 (Thurs 12/3, 12/10) will each include a short in-class quiz relating
to issues addressed in the readings for that class.
MIT standards on academic integrity: Students should review the MIT standards on
academic integrity, as set out at
http://integrity.mit.edu/handbook/academic-integrity-mit/what-academic-integrity
because they apply to work in this course, as in any other, but also because these standards
represent MIT’s thoughtful efforts to appropriately channel our creative and collaborative
energies within this community.
Grading
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The core of this course inheres in the class sessions. In accordance with the standards set forth
in Classroom Values@MIT Sloan, sessions will begin promptly at 6:05pm (Bears) and 7:35pm
(Bulls). In the event of an absence or lateness for a compelling reason (such as student illness
or illness in a family member), you should e-mail the TA before or shortly after the class in
question, with a “cc” to the instructor primarily responsible for that class, to request an excused
absence or lateness. (You do not need to include in the e-mail details of a personal nature.)
Attendance will be taken at all sessions. Under no circumstances should a student sign an
attendance sheet for anybody but himself or herself.
Grading is not tied to a strict formula, but will factor in the following components:
Team response paper
Insider trading case analysis
In-class quiz x 2
Attendance and participation
25%
25%
20%
30%
Readings
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All required readings will be posted on Stellar or distributed in class.
Contact information
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Instructor:
John Akula
E62-316
jakula@mit.edu
617 452 3619 (office)
857 928 4488 (cell)
Instructor:
Leigh Hafrey
E40-387
lhafrey@mit.edu
617 258 0266 (office)
Faculty Administrative
Assistant:
Patty Curley
Faculty Administrative
Assistant:
Amy Wasserman
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Course Teaching Assistant:
Laurel Grassin-Drake
E62-369
lgrassin@mit.edu
207 712 1763 (cell)
15.S06 Fall 2015 Syllabus – Draft of 10 09 15
pcurley@mit.edu
E62-311
617 253 5701
amyruth@mit.edu
E62-355
617 258 9360
Class-by-class topical outline for 15S.06 Fall 2015 H2
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Class/
Day/Date
Primary
instructor
1 Th 10/29
Hafrey
Primary focus
Key topic: In the beginning: nature, money, and the social
contract:
A brief historical and philosophical overview of the place of finance
in society, and a consideration of the values that inhere in the
generation and management of wealth. We start with a slide
sequence, then continue with an in-depth discussion of two canonic
texts on the subject.
Readings include:
 Thomas Hobbes, Leviathan
 John Locke, The Second Treatise of Government (selections)
2 Th 11/05
Hafrey
Key topic: Scenarios, stories, & entrepreneurs:
With an eye to the geopolitical realities of the early 21st century, we
consider an example of scenario planning that highlights potentially
dominant market frameworks and indicates the ethical
commitments they imply.
Readings include:
 Royal Dutch/Shell, “Global Scenarios 1995-2020”
 Liam O’Flaherty, “Two Lovely Beasts”
 Henri-Claude de Bettignies, “The Xi-Cheung Partnership”
(CEIBS/INSEAD CC-409-027)
3 Th 11/12
Akula
Key topic #1: The regulation of financial products and services –
key concepts and dimensions:
Disclosure and transparency. Fiduciary duties. Suitability and
complexity. Firm risk and systemic risk.
Key topic #2: Insider trading revisited:
Special relationship insider trading. The misappropriation theory.
Applying the rules. Recent developments. The transnational
dimension.
Readings include:
Akula, “The Law of Insider Trading in a Peanut.”
(over)
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15.S06 Fall 2015 Syllabus – Draft of 10 09 15
Class-by-class topical outline for 15S.06 Fall 2015 H2 (cont)
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4 Th 11/19
Hafrey
Key topic: Sustainable Investing.
Against the backdrop of Milton Friedman’s 1970 manifesto for
shareholder value and a 2014 guide to impact investing, we
consider the case of an asset management firm operating in the
name of sustainability.
Guests: Carolyn Dupont, Ben Strauss, and (tba): Sloan MBA
students will facilitate small-group discussion of sustainabilityrelated businesses and investment.
Readings include:
 George Serafeim, Bob Eccles, Kyle Armbrester, “Aviva
Investing” (HBS 9-112-047);
 Milton Friedman, “The Social Responsibility of Business Is to
Increase Its Profits” (New York Times Magazine, Sept. 1,
1970—on Stellar);
 Sean Green, A Short Guide to Impact Investing (Case
Foundation)—browse only.
No class Thursday 11/26 – Thanksgiving holiday
5 Th 12/03
Akula
Key topic: Regulatory enforcement and private company
compliance: The responsibilities and dilemmas associated with key
roles: Prosecutors; the board and senior management; target
employees; their supervisors and colleagues; lawyers for the
company and for individuals.
Guest: Lisa Wood, partner and co-chair of the litigation practice at
Foley Hoag.
Readings include:
 Akula, “Business Crime: What to Do When the Law Pursues
You,” Sloan Management Review, 2000 and 2010 (rev)
6 Th 12/10
Akula
Key topic: Employers and employees: Loyalty; changing jobs;
competition. Knowledge workers and rights in products of the mind.
The transnational dimension. One-sided contracts. Keeping and
breaking contracts and promises.
Guest: Lou Rodriques, former partner and co-head of the
employment practice at Bingham McCutchen.
Readings include:
 A typical employment agreement as used in the US financial
services sector, with provisions addressing non-disclosure,
invention assignment, non-solicitation, and non-competition.
 Ch 2 (“Leaving Your Employer”) from C. Bagley, The
Entrepreneur’s Guide to Business Law, (Southwestern; 4th ed.,
2012), pp. 12-34.
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