6 October, 2020
In the midst of a crisis, it’s not uncommon for people to take advantage of the situation in order to gain an unwarranted benefit. While sudden financial benefits are not inherently bad, they often come at the expense of others.
The COVID-19 pandemic created a massive market crash. Seeing as most communities were asked to stay indoors in order to help prevent the spread of the virus, many institutions were forced to close. Schools were shut down, businesses were temporarily suspended, and there have been widespread reports of hoarding and market manipulation. These are crimes that people need to be aware of so that they have a good idea of what to look out for and what to report to the authorities. So, what are these violations?
Hoarding
Hoarding is the practice of purchasing large quantities of goods with the intention of achieving personal gain. What differentiates hoarding with simply buying goods is when a person buys a quantity that is beyond reasonable. The danger this poses is that this upsets the balance between supply and demand. A commodity that is high in demand but low in supply will also tend to increase in price.
The worst example of hoarding during the pandemic was when people hoarded crucial items like rubbing alcohol, toilet paper and disinfectants, and then sold these items at extortionate prices.
Price Fixing
Price fixing refers to the act of setting the price of a certain good instead of allowing the free-market to determine its pricing naturally (through the dynamics of supply and demand). Price fixing puts an unnecessary burden on vital goods that would normally be accessible to most people, and this is especially distasteful during a pandemic, because people need supplies like rubbing alcohol, disinfectants, and face masks to function in the “new normal”.
Market Manipulation
Market manipulation is the act of inflating or deflating the price of stocks and securities through artificial means. This is similar to hoarding and price fixing in how this change in the market is artificially influenced by purchasing large quantities of a security in order to establish a ploy that that particular stock is performing well.
This is to get other people to buy that particular stock, thus increasing its value when in truth this increase does not reflect market conditions accurately. The market manipulator then sells the securities he previously hoarded for a massive profit and at the loss of other investors. It’s because of this that it’s always a good idea to seek the opinion of forensic economists like the ones from theknowlesgroup.org to help you get an accurate grasp of market conditions.
These acts are all punishable by law, and it’s important for members of society to help the authorities crack down on those who are taking advantage of the COVID-19 pandemic in order to profit at the expense of others.
