Case Study: Conflict of Interest in Investment Banking

Ahmed is an investment banker at a large financial institution in Saudi Arabia. He has been working on a
deal to help a client raise capital through a new stock issuance. Ahmed has built a strong relationship with
the client's management team and has become close friends with the CEO.
As the deal progresses, Ahmed learns that the CEO of the client company is also a major investor in
another company that Ahmed's firm is considering acquiring. Ahmed realizes that he now faces a
potential conflict of interest: if his firm acquires the other company, it could be seen as benefiting the
CEO's personal interests as well as his client's.

Discussion
According to the KSA professional code of ethics for finance, Ahmed has a duty to avoid conflicts of
interest and to act in the best interests of his clients. In this case, Ahmed should take the following steps:
1. Disclose the conflict of interest to his firm's compliance department and his supervisor, and
recuse himself from any decision-making related to the potential acquisition.
2. Seek guidance from his firm's compliance department on how to proceed and ensure that all
parties involved are aware of the potential conflict of interest.
3. Take steps to ensure that his personal relationship with the CEO does not influence his work on
behalf of the client. This may involve limiting contact with the CEO outside of work or seeking
input from other colleagues on the deal.
4. Uphold the confidentiality of his client's information and avoid using it for personal gain or to
benefit other clients.
By following these guidelines, Ahmed can maintain his ethical obligations to his client and his firm,
while avoiding any potential conflicts of interest that could harm his client's interests or damage his firm's
reputation.