The term “unethical business practices“ often leads us towards topics related to working conditions, but I`ve recently started thinking about it in broader terms. Is deceiving an investor just as unethical as mistreating an employee? The case of quote stuffing at the Trillium Brokerage Services firm in New York leads me to believe so.
Quote stuffing, for those unfamiliar with the term, is when “firms place thousands of buy or sell orders on a stock in order to influence the price, only to cancel the order before execution.“ This action misleads traders and forces them to make decisions that they wouldn`t without this false information. It also exposes the maximum price a buyer is willing to pay, and forces them to purchase at that price even after the quote stuffers have cancelled their asks. This is extremely unethical because the firm is using deception and is not following standard business practices, in order to maximize profit. In addition, the bidder is unable to make informed decisions and may lose large amounts of money.