Historic Survey of Financial Services Professionals Reveals Widespread Disregard for Ethics, Alarming Use of Secrecy Policies to Silence Employees

Labaton Sucharow LLP, which established the nation’s first practice exclusively dedicated to representing SEC whistleblowers, today announced the results of its collaborative survey with the University of Notre Dame’s Mendoza College of Business: The Street, The Bull and The Crisis. [LINK

The survey, the most expansive of its kind, polled more than 1,200 U.S. and U.K.-based financial services professionals to examine views on workplace ethics, the nexus between principles and profits, the state of industry leadership and confidence in financial regulators.  With findings pointing to a continued disregard for ethical engagement and alarming new tactics to silence potential whistleblowers, the industry appears to be faltering in its reform efforts.

Profits, Not Principles

In one of the most concerning findings, 47 percent of total respondents feel it is likely that their competitors have engaged in illegal or unethical behavior to gain an edge. While nearly one in five professionals feels it is at least sometimes necessary for financial services professionals to engage in illegal or unethical activity in order to succeed, a full 32 percent feel compensation structures or bonus plans pressure employees to compromise ethical standards or violate the law. Of those surveyed, 27 percent don’t agree that the industry puts the interests of clients first.

How severe is the ethical breakdown? An astonishing 22 percent of respondents say they have observed or have first-hand knowledge of actual wrongdoing in the workplace.  On an individual level, a quarter of those surveyed say they would likely engage in insider trading to make $10 million if there was no chance of being arrested. Employees with less than 10 years experience are more than two times as likely to use non public information than those with over 20 years experience, reporting 32 percent and 14 percent respectively

“Most disappointing is the lack of change in many of the results when compared to surveys from previous years. 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 and most likely, in other sectors as well,” said co-author Ann Tenbrunsel, Ph.D., David E. Gallo Professor of Business Ethics at the Mendoza College of Business and a co-author of Blind Spots: Why We Fail to Do What’s Right and What to Do about It.

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