Is it unethical for a company like Goldman to permit its managers to trade on the company's account (i. e., invest on the company's behalf rather than an external client's behalf) ? If not, how should policies be designed to prevent conflicts of interest from arising between trades on behalf of the firm and trades on behalf of clients?

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Business

Henson

2 January, 19:12

Is it unethical for a company like Goldman to permit its managers to trade on the company's account (i. e., invest on the company's behalf rather than an external client's behalf) ? If not, how should policies be designed to prevent conflicts of interest from arising between trades on behalf of the firm and trades on behalf of clients?

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Matteo Tapia · Answer 1

yes. it is unethical. many malpractices such as,

possibility for theft, insider trading, short selling fraud

could arise as a result of this. only the highest authoritative figures like CEO or CFO should be allowed to do that with transparency and accountability.