(November 28, 2012) – Finance is a dirty game, according to many of the people playing it.
A survey commissioned by Labaton Sucharow, a law firm specializing in whistleblower-protection, questioned 500 senior finance professionals about the prevalence of improper conduct.
Nearly 40% of respondents said their competitors have likely engaged in illegal or unethical behavior to get ahead. Slightly more Wall Street (40%) than City (36%) types thought their counterparts at other firms had been into something fishy.
Respondents were evenly split between London and New York.
Perhaps unsurprisingly, most had a cleaner view of their own workplaces than those of the competition. Just 12% in total believed it was likely that staff in their company had engaged in illegal or unsavory activity in order to be successful. That said, 59% didn’t rule out the possibility (39% in the UK; 43% in the US).
One of the most dramatic findings comes from the finance sector’s attitudes towards regulatory authorities. Only 30% believed that the US Securities and Exchange Commission (SEC) or UK’s Serious Fraud Office effectively deter, investigate, and prosecute securities violations.
“While financial regulators and law enforcement authorities across the globe have new leadership, new investor protection initiatives and record enforcement activity, professionals in the financial services industry do not yet believe that these watchdogs are effectively protecting the public,” the report asserted.
Women tended to trust and believe in these institutions more than men, with 40% having a favorable opinion, as opposed to 27% of men. The least trusting group were males working in the US, of which only 21% thought the SEC was working effectively.
Financiers ought not be too quick to dismiss the SEC, however, judging by the regulator’s latest results. In fact, the SEC may have outperformed many of these respondents recently.
The regulatory agency returned double its $1.5 billion budget in fiscal year 2012, levying fines totaling more than $3 billion. Of course, those fines go to wronged parties, not the SEC itself.
But we all know where those fines are coming from.