23 percent of finance industry insiders say they have observed wrongdoing in their workplace.
A new report on financial industry insiders about ethical conduct, suggests that Wall Street’s culture of greed and willful misconduct is as strong today as it ever has been. That’s not just sad, but dangerous for all of us. While I frequently ruminate on the fundamental problems with an economy designed to produce pollution, inequity, ill health and discrimination, increasingly I worry that the absence of a moral compass on an individual level will make these problems hard to correct.
I have often said the problem is that we do what’s legal, even if it’s immoral. But the finance industry proves me wrong by doing what’s both illegal and immoral.
We know Wall Street likes to talk about codes of conduct and ethics training, “No financial incentive or opportunity — regardless of the bottom line — justifies a departure from our values,” says Goldman Sachs. “Our integrity and reputation depend on our ability to do the right thing, even when it’s not the easy thing,” echoes JPMorgan Chase.
But a new study first reported by Andrew Ross Sorkin, the editor-at-large of The New York Times column DealBook shows that all that talk of morals and ethics never leaves the paper it was printed on. The study reveals some stark and deeply worrisome statistics. While the result of interviews with only 250 financial industry insiders from dozens of financial companies who included — traders, portfolio managers, investment bankers, hedge fund professionals, financial analysts, investment advisers, among others — 23 percent said that “they had observed or had firsthand knowledge of wrongdoing in the workplace.”
24 percent said they would “engage in insider trading to make $10 million if they could get away with it.”
26 percent of respondents said they “believed the compensation plans or bonus structures in place at their companies incentivize employees to compromise ethical standards or violate the law.”
Most of us believe that ethical problems come from poor leadership at the most senior levels: 17 percent said they expected “their leaders were likely to look the other way if they suspected a top performer engaged in insider trading.”
“15 percent doubted that their leadership, upon learning of a top performer’s crime, would report it to the authorities.”
“28 percent of respondents felt that the financial services industry does not put the interests of clients first.”
The next generation of leadership on Wall Street, its newest and youngest employees let us know that we are headed for more trouble not less. How might these young minds get the idea that greed is so good?
When you sort by age the answers to the question on whether an executive would commit insider trading for $10 million if there were no repercussions, respondents with under 10 years of experience were even more likely to break the law: 38 percent (as compared to the industry average of 24%) said they would commit insider trading for $10 million if they wouldn’t be caught.