Quest Ltd is a bank that is publicly listed on the Australian stock exchange. Although its primary income stream and profitability has been earned through the interest generated from loans provided to individual and corporate customers, in recent years a larger proportion of its profits have been generated by its financial planning division.The financial planning division now accounts for 38% of total profits and the CEO of Quest Bank, Roger Goodgreed was very pleased with that units' performance.

The head of the financial planning division, Hank Flushfunds has consulted with Roger that the reason for the spectacular rise in income generated from the financial planning division is because he has instituted an incentive bonus scheme for each of the financial planners. The incentive scheme includes a cash bonus of $12 000.00 for each financial product sold to clients. In addition, if the financial planner sold the "Prime Growth" financial product to clients, the planner would also receive an all-expenses paid holiday for 2 weeks at the Gold Coast staying at a luxury 5-star resort. The "Prime Growth" product is developed by a company called Sneak Ltd. Sneak Ltd is a 100% owned subsidiary of Quest Ltd.

One financial planner, Judy Fairminded has recently become aware that her colleague Frank Shark (CPA) has been selling financial products to older, retired Australians that she believes would put their finances at risk. In fact, recently, two retired couples lost 70% of the value of their investment (70% x $2 million = $1.4 million lost) due to investments made in highly geared start-up companies. Judy has raised this issue with her manager Hank. Hank responded that Frank is a great contributor to the team and has exceeded his sales targets and if Judy worked more diligently, she too could also earn a holiday bonus.

Required:

1. Briefly outline the facts of the case. (2 marks)
2. Identify the ethical principles and values as per APES 110 Code of Ethics for Professional Accountants. (5 marks)
3. Identify the stakeholders and how are they affected. (3 marks)
4. Outline some suggested courses of action. (3 marks)
5. Evaluate each option and make a recommendation. (2 marks)