Something has gone awry in an industry when a fourth of its senior executives report that they believe engaging in unethical and even illegal behavior is necessary to be successful, and that's exactly how 24% of senior Wall Street executives responded in a survey released Tuesday by whistleblowing law firm Labaton Sucharow. Reuters reports:
"In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful."
It's harrowing to consider that 24% isn't the number of senior Wall Street executives in the study who find unethical and even illegal behavior acceptable and even necessary in the world of high finance, but the number of them that are willing to admit it in the survey. The study reveals a rampant and entrenched culture of corruption in a financial industry wracked by scandal and massive losses.
Tuesday's report comes on the heels of investigation into the scandalous mismanagement of shareholders' money at JP Morgan Chase and Co as well as the unfolding drama over the Libor rate fixing scandal in the UK, which looks to have swindled literally trillions for big banks from the entire global economy in artificially-fixed interest rates.
That big financial corporations are caught up in ethically and legally dubious activities, and even that prevailing attitudes normalize, rationalize, and tolerate such behavior are hardly startling revelations. Corporate and political malfeasance will continue as long as the American public remains complacent about it. After news of the survey results broke early Tuesday morning, top Google search trends included terms like "Usher" and "Kourtney Kardashian," but did not include any terms related to Wall Street or the Libor investigations.
A day before the survey results were publicized, Glenn Greenwald, commenting on the Libor scandal, perfectly summarized the direct relationship between political complacency and financial fraud:
"The single most remarkable (and revealing) fact of the Obama presidency may very well be the lack of a single prosecution of Wall Street executives for the massive fraud that precipitated the 2008 financial crisis.As long as we maintain the impunity Morgenson describes, no rational person should expect anything other than pervasive elite corruption and lawbreaking. If you remove the fear of criminal punishment for the nation’s political and financial elites — as we have done — what possible constraint on their behavior does anyone think will remain?"
The timing of Labaton Sucharow's survey announcement merely serves to punctuate Greenwald's point. As long as America remains complacent about holding white collar crime accountable, there will be no incentive for Wall Street to clean up its act.