Bad Behavior in the Financial Industry
A sizeable number of financial services professionals said they have either observed, have firsthand knowledge of or feel pressured to engage in unlawful or unethical behavior, according to a new survey.
The survey was conducted by Labaton Sucharow, a law firm that specializes in protecting and advocating for Securities and Exchange Commissionwhistleblowers. The firm asked 500 senior-level finance professionals in the United States and the United Kingdom (mostly in New York and London) about ethics and illegal activity in the financial services industry.
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Among the survey’s findings were:
- 24% of respondents believed rules may have to be broken in order to be successful;
- 30% felt pressure to compromise ethical standards or violate the law as the result of their compensation or bonus plan; 23% also felt other pressures to compromise ethical standards or violate the law;
- 26% of respondents said they have observed or had firsthand knowledge of wrongdoing in the marketplace; 12% believed it was likely that staff in their company have engaged in unethical or illegal activity;
- Just 41% said staff within their own organization had “definitely not” engaged in unethical or illegal conduct to be successful;
- 16% of respondents admitted to being fairly likely to engage in insider trading if they could get away with it; only 55% of respondents said they would definitely not engage in insider trading if they could make $10 million with no risk of getting arrested;
- 14% feared their employers would retaliate if faced with a report of wrongdoing in the workplace; only 35% felt certain their employer would not retaliate; and
- 94% of respondents would be willing to be a whistleblower for the SEC if they were given anonymity, employment protections and a monetary award, but just 44% were aware that the SEC had such a program.
The survey raises questions about whether enough is being done to curb illegal practices and unethical behavior. At the same time, it is important to note that many respondents said they neither engaged in unethical and illegal behavior nor felt pressure to do so. So while there are wrongdoers, they are not representative of everyone who works in the financial services industry.
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