April 7, 2021 via Zoom
Gordon Haist, Moderator
Paul Weismantel, Presenter
The moderator for this session was Gordon Haist and the presenter was Paul Weismantel. A more descriptive title was offered by Betsy Doughtie: “GameStop Stock Manipulations, with Ethical Questions about Finance.”
Haist introduced Weismantel, who a year ago gave us a presentation on social media disruptive innovators. We described him then as a “deep level” digital electronics and social media expert. For over 35 years Paul was a product manager in major multi-national companies and managed growing businesses through technology and market transformations. Now retired, he has grown curious about the GameStop phenomenon and rightly sensed that it would not be a unique event. Other market manipulations of a similar sort could follow.
The program began with Haist reading Neil Funnell’s three questions, which framed the discussion:
He then described the GameStop “players”:
Paul discussed the ethical questions that result from the GameStop trading frenzy.
Neil questioned if there should be a tax on trades. Perhaps a transaction charge. Paul questioned how this could be done, and on what value would you tax?
There was quite a discussion about transparency.
Hank asked if privacy is the opposite of transparency.
Hank asked if liquidity is the outcome or the purpose of the stock exchange?
Hank brought up the question of Wall Street versus Main Street and said that 60% of Americans are impacted by the stock market in some form. For many it is tied to their 401K, pensions, or other investment products such as insurance products. Many small investors have no idea of how it works.
Paul said that often financial companies are not required to act in the best interest of their clients. He added that for those owning a 401K there are few options for choosing investments. Investors should always ask their broker if he is acting in a fiduciary manner for the client. Bill added the question of commissions versus fees, and that we don’t always know how the broker is compensated. Paul said all brokers should have business cards that read “I am a fiduciary broker”. A few years back congress tried to pass regulations of fiduciary brokers but the bill went nowhere.
Gordon wrapped up the meeting with the statement: Transparency versus privacy in the financial world is a critical question.