The LIBOR debacle now dominating headlines is just the latest wave of bad news to wash over the financial services sector.
Or as a New York Times columnist opined Wednesday, "Perhaps the most surprising aspect of the LIBOR scandal is how familiar it seems."
As if to reinforce this notion, the New York law firm Labaton Sucharow on Tuesday released the troubling results of a survey of 500 American and British financial services professionals on corporate ethics, the regulatory landscape and individuals' willingness to blow the whistle on wrongdoing.
According to the survey, 24% of respondents believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful, while 26% said they had observed or had firsthand knowledge of wrongdoing in the workplace.
And 16% of the professionals surveyed said they would engage in insider trading if they could get away with it.
"When misconduct is common and accepted by financial services professionals, the integrity of our entire financial system is at risk," Jordan Thomas, partner and chairman of Labaton Sucharow's whistleblower representation practice, said.
In a telephone interview with AdvisorOne, Thomas said that disturbing as these findings were, they did not surprise him, as they reflected similar sentiments in the wider workplace.
He noted that his firm's December 2011 Ethics & Action Survey found 34% of Americans reporting that they had observed or had firsthand knowledge of misconduct in the workplace.
The new survey also revealed the following:
- 39% of respondents believed their competitors were likely to have engaged in illegal or unethical activity in order to be successful
- 30% said their compensation or bonus plan created pressure to compromise ethical standards or violate the law
- 23% reported other pressures that might lead to unethical or illegal conduct
- Only 30% felt the SEC and Britain's Serious Fraud Office effectively deterred, investigated and prosecuted misconduct—despite new leadership, record enforcement actions and recent reforms
- 29% felt the same way about FINRA and the U.K.'s Financial Services Authority.
Thomas noted that British responses to the survey questions were "slightly worse" than American ones. This was a surprise, he said, because he would have expected more "cowboys" in the U.S.
