A data processing analyst for a research supplier finds that a preliminary computer run of survey results show that consumers love a client’s new product. The employee buys a large block of the client’s stock. Discuss the ethical ramifications of this decision. Which research participant or participants will be harmed by this action?
http://en.wikipedia.org/wiki/Insider_trading
http://www.investopedia.com/terms/i/insidertrading.asp#axzz1dzYrYNdX
Let us know what you decide to write.
The ethical ramifications of the data processing analyst's decision to buy a large block of the client's stock based on the preliminary computer run of survey results can be assessed from a few perspectives.
1. Conflict of Interest: The employee has a conflict of interest by investing in a client's stock while being responsible for analyzing and interpreting survey data objectively. This raises concerns about the potential manipulation or bias in the analysis to benefit their own financial interests.
2. Insider Trading: If the analyst uses non-public information obtained through their role at the research supplier, such as access to early survey results, to inform their investment decision, it could be considered insider trading. Insider trading is illegal and unfair as it gives the employee an unfair advantage over other investors.
3. Breach of Confidentiality: The analyst may be violating the confidentiality of the research participants by utilizing their survey responses for personal financial gain. This can erode trust between the research participants and the research supplier, potentially compromising the integrity of future studies.
Regarding the participants who might be harmed by this action, it is important to note that the specific harm can vary depending on the circumstances. However, potential harms could include:
1. Misleading Data: If the analyst manipulates or distorts the survey data to support their investment decision, it undermines the accuracy and reliability of the research findings. This can misinform the client and harm their decision-making process.
2. Exploitation of Participants: The participants who took part in the survey might not have been aware that their responses could be used by the analyst to make personal financial gains. This exploitation of their trust and personal information can harm their privacy and sense of fairness.
To summarize, the data processing analyst's decision to invest in the client's stock based on preliminary survey results raises ethical concerns such as conflicts of interest, potential insider trading, and breaches of confidentiality. The potential harms can include misleading data and exploitation of research participants.