Question

The television network CNBC and other television networks have been working to develop policies for their business correspondents and guests on their business shows because of conduct known as pump-and-dump, the practice of a Wall Street professional or network correspondent appearing on television to tout a particular stock as being a good buy. Often, unbeknown to the viewing audience, the guest or correspondent promoting the stock has a large holding in it and, after the television show runs and the stock price creeps up, sells his or her interest at a higher price than would have been possible before the show on which the person raved about the stock appeared. What category of ethical issues exists here? If you were a network executive, what would you do to remedy the problem? Should the government regulate such practices?

Answer 1

If we look at the given question, it is quite evident that there are some issues related to integrity and truthfulness. If the real truth or facts are not being communicated to the customers, they will not be in a position to judge whether the person who is adverting I the same who is also enjoying the profit resulting from the sales and it can lead to some conflict of interest as the customer will depend on buying the products advertised as they will start trusting on the individual appearing in the adverts they think that the person shown in the advertisement is credible enough to trust his or her claim. Thus the individual who is claiming that the product is a good buy and can be used can be seen as having some personal interest in promoting the selling the product and it represents the conflict of interest

I have strong opinion that there must be an intervention of the government as the government has to ensure that the rights and benefit of the common customers are protected and a fairground is provided to make the fair and informed decision, As these people try to influence the decision making of a common person without actually using the product, they are guilty of fooling the customers. Thus the government must take some initiatives