Wall Street sees dodgy deals as key to successBy: ANDREW BEATTY
WASHINGTON – A quarter of Wall Street and British financial executives have witnessed unethical or illegal conduct and as many believe, such actions are needed to succeed, an industry survey released on Tuesday showed.
Twenty-six per cent of financial professionals polled by the New York-based law firm Labaton Sucharow said they had observed or had first-hand knowledge of wrongdoing at work.
Some 24 per cent said they “may need to engage in unethical or illegal conduct in order to be successful” and 16 per cent admitted they would commit the crime of insider trading, if they could get away with it.
“When misconduct is common and accepted by financial services professionals, the integrity of our entire financial system is at risk,” said Jordan Thomas, head of Labaton Sucharow’s whistleblower representation practice.
The survey will do little to boost confidence in the financial sector, which is already at an all-time low.
The industry has faced a string of controversies, legal investigations and denunciations since being blamed for helping to run the global economy into the ground via the 2008 financial crisis.
According to a recent Gallup poll, Americans’ confidence in their banks is now at a record low of 21 per cent, after the greatest decline of any institution relative to its historic average.
The latest scandal involves charges that Barclays traders manipulated key inter-bank lending rates that underpin the entire banking system.
The so-called Libor rate is used as a reference point for a range of consumer interest rates across the world, from US credit cards to European mortgages.
The controversy forced Barclays chief executive Bob Diamond to step down and may yet engulf other firms.
The Labaton Sucharow survey also provided some insight into why there may be such broad acceptance of dodgy dealing.
In a high-octane industry – where fortunes can be made or lost in seconds – money, stiff competition and a lack of policemen on the beat all seem to play their role in promoting wrongdoing.
Nearly half of the respondents said their competitors have engaged in illegal or unethical activity.
Thirty per cent of respondents said their pay or bonuses put pressure on them to violate ethical standards.
Since the global financial crisis, governments on both sides of the Atlantic have introduced packages of sweeping reforms, including measures to curb bonuses that encourage reckless bets and boost the powers of regulators.
But there seems to be little fear of the watchdogs, who regularly complain they are outgunned by the super-rich industry.
Just one in four professionals said that financial services watchdogs or law enforcement agencies were effective at policing the sector.
The survey was conducted in June and included 500 respondents in Britain and the United States.
Financial services groups declined to comment on the survey. – Nampa-AFP