Questions 1- What type of ownership was involved ? What can be assumed about this type of ownership ? Was it appropriate for Aunt Mabel? 2- What stakeholders are involved ? 3- What are ethical issues or implications involved?4- What ethical responsibilities do the adviser and the financial institution have toward any type of investor, and in particular toward an inexperienced and nave one ? 5- What advice should Karl give ? Please provide clear answers with references. Thank you.

11.1 AUNT MABEL'S EXPERIENCE WITH OWNERSHIP Karl Stillings' Aunt Mabel called him on a Saturday morning and wondered if he could drop in to visit her that afternoon. Aunt Mabel was a widow; Uncle Richard had passed away about 18 months ago. She was quite concerned about her investments and would appreciate Karl's advice since he had recently graduated from a business program. During his visit Karl was not surprised to learn that his aunt had no investment experience-his uncle had looked after all financial matters. She had become a widow at 62 and found she had cash assets of about $200,000 from an insurance policy and savings. She approached a financial institution and was assigned an adviser. The adviser had Aunt Mabel sign an account agreement, which she admitted to Karl she did not read in detail as it was several pages and in small print. Besides, she trusted the financial institution and the young and very personable adviser. The adviser initially invested the money in low-risk money market funds. A few months later he moved the money into higher risk equity or stock funds with higher fees and commissions. He then arranged a $ 100,000 loan secured against her existing equity, which he invested in very high-risk equity. Aunt Mabel questioned this, but was told it was allowed in the agreement she'd signed. While visiting the adviser recently, Aunt Mabel was told, after she had insisted, that she had lost $40,000 on her investments. She told the adviser she wanted out, but the adviser said there would be expensive redemption fees. Also, he advised waiting a while as markets turn around, and there was a possibility for making a lot of money. Aunt Mabel became very upset and did not know what to do. She decided to seek someone else's advice and that is why she contacted her nephew. Over a cup of tea and biscuits, Aunt Mabellesked Karl what she should do now