Junior traders at a firm notice a flaw in the

Solution

The scenario describes Upward Communication, which refers to the flow of information from subordinates (junior traders) to superiors (the CEO). In this case, the communication process is blocked by a psychological barrier of fear of consequences, preventing critical feedback about the risk model from reaching the leadership.  Upward communication is often blocked by "Filtering" or the "MUM Effect" (Keeping Silent about Bad News). Subordinates often withhold unpleasant information from superiors to protect their own careers or to avoid upsetting a powerful leader, which can lead to organizational disaster.