No oversight at the brokerage. I was a retail stockbroker working on a team that catered to high net worth speculative investors. One night I had some spare time, so when our team risk report arrived, I decided I could do a favor for the teammate who normally signed off on risk reports and take care of it myself.

I was astonished to find that she had not done any oversight for weeks. As a result, we had been in violation of New York Stock Exchange regulations for quite a while, and dozens of client accounts were illegally overextended. Three accounts had no equity left, and our firm was stuck with hundreds of thousands of dollars of customer losses. My teammate had signed off on all of the daily risk reports, attesting to our accounts being in good standing. This was a shock, given that we were a tight-knit group. The problem had to be corrected, but I didn’t want to be the one to expose it. Revealing the lapses would embitter my manager and teammates and perhaps invite reprisals. It would do nothing for my advancement and would poison the collegial atmosphere of our team. I wanted to look the other way and let someone else discover the problem. Did I have an obligation to speak up? Hint: How does this case differ from?