Jonathan Lebed Case Analysis

6 June 2017

Brief Summary During 1999 to 2000, Jonathan Lebed, a 1 5-years-old high school student, began using fictitious names to promote stocks on Yahoo’s finance message boards and chat rooms from his New Jersey bedroom (Rushworth, 2008). He encouraged investors to purchase penny stocks he already owned, and those stocks of companies are undervalue and interested amount investors selected by Jonathan Lebed. In that period, he had done 11 times smoke-out those messages, each time triggering chaos in the stock market, and finally made more than $800,000 in six months by taking advantage of others who believed the false notices posted.

The U. S. Securities and Exchange Commission caught him for using many different screen names to post notices about the value of stocks he had purchased so that he could pump up their value and then sell them (Marianne, 2012). The Context The situations of that time, or it is still now, is that people who trade stocks, trade based on what they fell will move and they can trade for profit. According to Jonathan’s narrative in Michael Lewis’s report, nobody makes investment decisions based on reading financial fillings. Whether a company is making millions or losing millions, it has no impact on the price of the stock.

Jonathan Lebed Case Analysis Essay Example

Whether it is analysts, brokers, advisors, Internet traders, or the companies, everybody is manipulating the market (Michael, 2001). It is the background of the Jonathan Lebed case. Even he is only 15, when he talk like an expert on Internet, people believe him. In addition, his father’s colleagues, who know Jonathan Lebed, still ask for advise. Back to 2000, when Jonathan Lebed began his stock trading, the Internet’s rapid expansion had enabled an equally rapid expansion of web-based professional services. It has not been matched by the consideration and understanding of the related ethical implications Oeanne, 2008).

The growth of new opportunities is accompanied by equal, if not greater, growth in ethical issues for businesses seeking to expand their offerings via the Internet. These issues include the quality of services and information, privacy and security, nature of relationship, forms of delivery, contractual considerations, and regulation and enforcement Oeanne, 2008). Jonathan Lebed learned how to trade stocks on television shows. No one teach him what should do or not on Internet. In his family, his parents know nothing about computer and Internet. To them, what Jonathan Lebed had done on Internet are beyond their apprehension.

His father said testily, ” It was that goddamn computer what was the problem. ” Even after the trial, they still don’t understand what the problem it is, why Jonathan Lebed’s behavior is unethical and illegal. Broader Ethical Perspective According to James J. Cramer’s critical states, Michael Lewis wrote a viciously cynical piece that argued that because Mary Meeker and Henry Blodget and everybody else were so wrong about stocks but made a fortune, why can’t Jonathan Lebed, who made money for people, get away with writing what he wants about stocks and make a ortune, even if it turned out not to be true dames, 2001).

In my point of view, it is hard to determine Jonathan’s action is illegal or not, but it is truly unethical. ” he was proud of his son because his son was doing what all the other analysts and investment firms on Wall Street were doing. His mother also thought, because after first called by S. E. C. Jonathan didn’t get any penalty, so there is no problem with his son until they got subpoenas. They wait until the lawyers tell them it’s wrong. Jonathan and his family are really believed that it doesn’t really hurt anyone.

On ontrary, they believe Jonathan is helping people. In Michael Lewis’s report, he also believe Jonathan is not as guilty as it seems. Instead of accuse Jonathan, he thought, ” That’s the way it has always been done” like Wall Street Analysts. Furthermore, he believed “the system is unfair”, and “it’s a Gray Area” (Marianne, 2012). Jonathan parents’ attitudes are questionable. Even after the trial and all the media chaos, they still think Jonathan wasn’t doing anything wrong.

The problem is the computer, the technology and the society. A new study examined inflated self-esteem, the kind that an come not from actual achievement but form teachers and parents drumming into kids how great they are. The researcher fined that this sort of unjustified self- esteem can trigger hostility and aggression, and may even underlie violence like the recent school shootings (Sharon, “I’m 0k”). High self-esteem that is unjustified and unstable-Bushman’s definition of narcissism- also puts a kid at risk of turning violent.

In his view, narcissists are supersensitive to criticism or slights, because deep down they suspect that their felling of superiority is built on quicksand. Even though they ay’ the world would be a better place if I ruled it,” if that grandiosity is challenged they may lash out (Sharon, “I’m 0k”). In Jonathan’s case, his lawyer discovered he had a problem. No matter how he tried, he was unable to get Jonathan Lebed to say what he really thought (Michael, 2001). This description makes Jonathan suits the common characteristics of Psychopath. Hervery M.

Cleckley defined that psychopath have the following characteristics: Superficial charm and average intelligence; Absence of delusions and other signs of irrational thinking; Unreliability; Untruthfulness and nsincerity; lack of remorse or shame; antisocial behavior without apparent compunction; Poor Judgment and failure to learn from experience; Pathological egocentricity and incapacity to love; General poverty in major affective reactions; Specific loss of insight; Unresponsiveness in general interpersonal relations; Fantastic and uninviting behavior with drink, and sometimes without; Suicide threats rarely carried out; Sex life impersonal, trivial, and poorly integrated; Failure to follow any life plan (Charles, ” Characteristics of”). It is appearance that Jonathan has some of these characteristics. The Stakeholders According to S. E. C. ‘s case file, the stakeholders includes Jonathan Lebed, his follower, and the company which he forecast its stock price, includes Manchester Equipment Company, Inc. , Just Toys, Inc. , Yes Entertainment, Inc. , Fotoball USA, Inc. , Man Sang Holdings, Inc. , West Coast Entertainment, Inc. , Havana Republic, Inc. , Classica Group, Inc. and Firetector, Inc. (“In the matter,” 2000). Jonathan Lebed and his follower will face the most serious stakes.

Because Jonathan Lebed forecast the stock price without reasonable analysis, they are only gambling the stock performance. Jonathan Lebed can take advantages from manipulate the stock price, then the follower will be the victim. For the company involved in his forecast, they also face serious stakes. Their company’s stock price will not base on real market performance. The as Ira Monas, one of Jonathan Lebed’s many Internet correspondents, eventually jailed on unrelated charge, had been employed in “investor relations” by a number of small companies. He had fed Jonathan Lebed information about the companies, some of which turned out to be false and some of which Jonathan had unwittingly posted on Stock-dogs. com (Michael, 2001). The Lessons

When people make decision in the business world, they always should consider the legal, profit and ethical issues. The bottom line is the decision must legal. Ethical issues consideration becomes more and more important because of media involve. For the company’s long-run aspect, being ethic could bring the company good reputation and potential profit. 1982 Chicago Tylenol Murders case, after the first of 7 people died after taking Tylenol capsules purchases in the Chicago area. Within one week, recalled 31 million bottles of Tylenol, which is worth an estimated $100 million. Tylenol quickly recaptured its market share. It prompted change to caplet and tamper-evident safety seals on boxes and bottles.

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