A new report suggests that instilling ethics in Wall Street may be as hard as teaching an old dog new tricks.
Years after a worldwide financial crisis battered the industry, bankers continue to engage in much of the same unethical conduct that helped trigger the meltdown, a survey of financial professionals in the United States and the United Kingdom finds.
In the wake of the collapse, Congress passed the Dodd Frank Act in 2010, a bundle of sweeping financial reforms billed as the biggest overhaul of banking rules since the Great Depression. Firms committed to rein in the industry’s Wild West culture, and regulatory agencies vowed to double down on fraud.
But the latest survey, conducted by Notre Dame and Labaton Sucharow, a New York law firm known for protecting financial whistleblowers, indicates that the financial sector may be increasingly reverting to old habits.
Nearly a quarter of the 1,200 financial workers surveyed said they suspected their colleagues had engaged in unethical or illegal activity Nearly a quarter of the 1,200 financial workers surveyed said they suspected their colleagues had engaged in unethical or illegal activity in order to get an edge in the market. That’s nearly double the number that a similar survey reported in 2012.
Additionally, nearly 50% said their rivals had likely cheated to get ahead, and about one in five said that breaking the rules is necessary for success in the hyper-competitive industry. Both figures represent a significant jump from three years ago.
Each of these stats is slightly higher among those with salaries of half a million dollars or more, implying that wrongdoing may proliferate as Wall Street’s workers gain more pay and experience.
What’s more is that workers who speak out about ethical breaches may face consequences, according to the survey. One fifth of those polled said that they would fear retaliation from their firms if they reported issues to regulators.
“When corporate whistleblowers are prohibited, discouraged or retaliated against for reporting crime to cops, we should all be scared—very scared,” Jordan Thomas, a Labatan partner who co-authored the report said in a statement.
The troubling backslide in attitudes towards ethics shows that more reform is still needed to achieve a real change in industry culture, according to co-author Ann Tenbrunsel, business ethics professor at the Mendoza College of Business.
“Despite significant energy and efforts, it appears we need to continue to think about how to improve the culture of ethics in the financial services industry,” Tenbrunsel said.
Not surprising in any way!