September 26, 2005

Pump and Dump

This is exactly what I have been trying to tell my accounting ethics students about the problem of getting a corporation's agents to act in the corporation's best interests. Executives may have an incentive to manage to boost the short-term stock price at the expense of fundamentals; as long as information flow isn't good enough to get appearance to line up with reality, they can do that. I should have assigned Mark Schmitt's post as reading.

Posted by Matt Weiner at September 26, 2005 05:22 PM