A significant percentage of hedge fund professionals have witnessed misconduct, and say they lack confidence in regulators and their own leaders, according to a study released Tuesday.
ORC International conducted a confidential online survey in February and March of 127 respondents age 18 or older who work in the hedge fund industry. The survey was commissioned by the law firm Labaton Sucharow, HedgeWorld and the Hedge Fund Association.
The survey’s findings include the following:
— 46% of respondents reported that their competitors likely had engaged in unethical or illegal activity in order to be successful
— 35% reported feeling pressured by their compensation or bonus plan to violate the law or engage in unethical conduct, while 25% reported other pressures that might lead to unethical or illegal conduct
— 13% said hedge fund professionals may need to engage in unethical or illegal activity in order to be successful and an equal percentage said they would commit a crime—insider trading—if they could make a guaranteed $10 million and get away with it
— 30% said they had personally observed or had firsthand knowledge of wrongdoing in the workplace
— 87% said they would report wrongdoing, given protections and incentives such as those offered by the SEC Whistleblower Program, of which 83% were aware.
The investor protection whistleblower program has broad extraterritorial reach and offers eligible whistleblowers, regardless of nationality, significant employment protections, monetary awards and the ability to report anonymously, according to a statement of the survey findings.