2/13/14
Ethics in The Stock Market To do what may be better for you or to do what is right? That is the question that one must ask them when faced with an ethical issue. The right thing may not be what will be best for you in the given situation and the other way might be the easy way out or a shortcut in your workplace to say, but what path would you take? In the stock market specifying in stockbrokers trying to get you to buy stocks ethical issues come up every day. A visual example is in the new movie "Wolf of Wall Street". Where they are selling penny stocks and lying to the consumer to hype up the company and get them to buy stocks because they receive 50% commission off of their sales. I believe that it is unethical to commit fraud, lie to customers, and scam customers, to financially better yourself.
Fraud happens in the stock market all over the world and you hear cases of it in the news and online all the time. One case was back in 2010 where a woman named Lori Zoval was convicted of reaping over 439,000 from a couple and using it for her own personal needs and wants. (Singer). This is a perfect example of the dark depths of the stock market that no one really has shined a light into. In this case she was eventually caught for stealing $24,939 and sentenced to three years in prison but never the full amount. Cases of fraud are sticky because usually the people who commit the fraud have extreme experience and know certain loop wholes in the system in place today. Cases of fraud are perfect example of being unethical, stealing peoples life earnings for your own personal needs. There are various lies told by stock brokers a few common ones are things like these, “This Stock is a sure thing.” This is impossible to predict unless the broker has an inside source which is highly unlikely. “This stock will hit 50 by June.” This also is impossible to predict, there is no possibility to know if a stock is going to go up down or hell even sideways and stay the way it is. “You can get your money out any time you want.” This is almost never true because depending on what kind of stock it is varies if there is a fee for pulling out too early. Lying to the consumer has no idea not only their background but also their money supply. By lying to a consumer about a stock and having them invest their life savings into a company you could ruin their lives. People will put X amount of dollars into the market hoping to double the money to pay off any potential debts that they might have say like loans, mortgage etc. Granted, the people who do put the money in the stock market are in no way shape or form forced to do so. Brokers are naturally known for being very good with their words and are shaped into knowing exactly what to say and when to say it. The issue with this is that they can sugar coat just about any information on stocks to make it sound like a good thing in your favor. This is what they are taught, this is apart of their job’s, commission is their lives and the effects the stocks have on you does not always matter to them. However they are persuaded through ways stockbrokers are taught. Once persuaded people will think about all the financial problems that they could potentially solve if the deal is as good as the broker makes it seem, security for their family, debts, or a college fund. So they take the risk and more likely then not, the risk doesn’t pan out to reach the dreams that they hoped for. But the brokers are left to make a decision, to be honest with this client and hope he buys based off of my honest opinion? Or do I lie to him to make a stock sound unbelievable and almost too good to walk away from so that they must buy? I believe that regardless of their success as a broker honesty and integrity should come first and foremost. This honestly will spread a good word around about what type of broker you are and if you are successful then your reputation will sky rocket move you up the chain