Search for 'ignoring stop loss limits' has some interesting posts around risk management & ethical trading.
Thanks everyone for your comments. As people rightly surmised, my hypothetical situation was based largely on fact. While I spoke of it in the current tense, it actually happened a short while ago, and I am now trying to make sense of it all. As things transpired, the manager's let the position ride. The market did reverse itself, and we made back almost the entire loss. The parent company is none the wiser.