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July 18, 2013 at 10:56 AM
A quarter of financial services professionals would engage in insider trading to make $10 million if they could get away with it, and a far higher proportion of younger Wall Street professionals, 38%, would do so, a new survey reveals.
A newly released report by Labaton Sucharow, a law firm specializing in SEC whistleblowing cases, reads like those surveys of high school students revealing the prevalence of behaviors their parents wouldn’t approve of.
“We discovered that Wall Street’s future leaders, the young financial services professionals entrusted with, literally, trillions of dollars, feel the most pressure, are the most willing to engage in illegal activity and are the most fearful of retaliation,” the law firm reports in its second annual survey of the U.S. financial sector.
The survey’s comparisons with the attitudes and behaviors were consistently worse than its findings in its 2012 debut. For example, 29% of those surveyed felt that success in the industry required unethical or illegal activity, a 17% increase from last year; and 24% thought that staff at their company had engaged in miscreant behavior, a 14% increase from 2012.
The overwhelming majority of findings in the survey of 250 respondents who work as traders, portfolio managers, investment bankers, hedge fund professionals, financial analysts, investment advisors, asset managers and stockbrokers, were likewise unflattering to Wall Street.
A majority of respondents, 52%, felt their competitors were breaking the rules to get an edge in the marketplace; 23% said they had firsthand knowledge of wrongdoing in the workplace; and 26% said their compensation structures incentivized unethical or illegal behavior.
The study was the subject of a CFA Institute ethics webinar Wednesday afternoon that reinforced those findings with similar points. For example, the CFA Institute’s ethicist Michael McMillan cited jury testimony by Kweku Adoboli, whose rogue trading cost UBS $2.2 billion, to the effect that senior managers were aware of his actions and encouraged his risk taking. Circumventing rules was standard behavior at the firm, McMillan said, and Adoboli only got into trouble because he lost money.
