Surprise! New Study Finds Wall Street Is As Greedy And Immoral As Ever

Seven years have passed since Wall Street crashed the world’s economy, and guess what? They’re as greedy and immoral as ever.

Sure, we get to cheer as our corporate kleptocracy hands us an occasional victory, yet these victories ring hollow as Wall Street banks get bigger and fatter and more profitable than ever.

Hooray! Standard and Poors settled with the U.S. government for helping cause the 2008 meltdown. Boo! They only paid a paltry $80 million to the Securities and Exchange Commission (SEC) and mumbled some vague not-apologies and “admissions of wrongdoing.” Hooray! Six big global banks paid $4.3 billion to regulators in the U.S., U.K., and Switzerland…But wait: That was after manipulating the foreign currency exchange for an entire six years. And the Foreign currency exhcnage is worth $5.3 trillion per day. What a joke.

Now, the New York Times reports on a new study that reveals some disturbing information about Wall Street and the financial industry.

A new report on financial professionals’ views of their industry paints a troubling picture. Rather than indicating that Wall Street has cleaned itself up, it suggests that many of the lessons of the crisis still haven’t been learned. And the mind-boggling settlement numbers, as well as stringent new rules, like the of Dodd-Frank regulatory overhaul in 2010, appear to have had little deterrent effect.

Of course, we need to take the study with a grain of salt, because it was conducted by Labaton Sucharow, a law firm that represents whistleblowers. Still, they had researchers from University of Notre Dame took an independent survey of 1,200 financial professionals in the U.S. and in the U.K. And, really, the only thing we Americans get to feel good about is that the U.K. financiers are even more sleazy then the ones on this side of the pond.

Labaton Sucharow Partner and Chair Jordan A. Thomas declared that the culture of Wall Street and the financial industry put our economy at risk:

“Many in the financial services industry appear to have lost their moral compass, and younger professionals pose the greatest threat to investors. Wall Street needs to take the first step toward recovery and admit that it has a corporate ethics problem, or Main Street should brace itself for more scandals.”

The folks on Wall Street can’t lose a “moral compass” they never possessed, but otherwise, this writer agrees with the above statement.

Here are some key findings from the study (which you can download here).

  • 47 percent believe their competitors did something unethical or illegal to get ahead in the market (but of course only a still-high 23 percent believe people in their own companies did so).
  • Over a third (34 percent) of financial professionals “earning” $500,000 or more say they have “first hand knowledge” of wrong doing in the workplace.
  • 25 percent would illegally use inside trading information if they were guaranteed to make $10 million and not get caught.
  • Almost one in five believe people in the financial services industry need to “at least sometimes engage in illegal or unethical activity to be successful.”
  • Almost a third of financial professionals surveyed (32 percent) believe their pay and bonus structures encourage wrongdoing.
  • A third (33 percent) do not believe their industry has changed for the better since the crash of 2008.
  • 17 percent do not believe the top brass would report illegal activities to the authorities.
  • One out of 10 financial professionals surveyed said they have signed or were asked to sign a gag order that would ban them from whistleblowing. 16 percent report policies and confidentiality agreements that ban reporting illegal activities to the appropriate agencies.
  • 25 percent of those making $500,000 or more said they were asked to sign gag orders.
  • Alarmingly, more of those with fewer than 10 years of experience in the finance industry (13 percent compared with 7 percent of those with 21+ years) were asked to sign these gag orders.
  • 39 percent believe law enforcement and regulators are “ineffective” at “detecting, investigating, and prosecuting securities violations.”

Thomas also told the New York Times, “The vast majority of people are good and ethical, but they have become desensitized on Wall Street. Regardless of whether people in the finance industry start out as “good and ethical,” their culture of greed needs to change.

Because on Wall Street, greed is always good.

And just for old times’ sake, here’s Gordon Gekko’s “Greed is Good” speech from the 1987 classic, “Wall Street.”


Photo of Wall Street bull: Travel Blog.