Gary DeWaal and Associates LLC


Is Gordon Geko Still Walking the Trading Floor?

Culture and Ethics    Between Bridges   
Published Date: July 16, 2013

This is disturbing!

According to a new survey published by the NY law firm of Labaton Sucharow, the number of Gordon Geko's on Wall Street may be increasing not decreasing – despite the increased harshness of regulatory oversight and constant media and legislators' scrutiny.

Although the Firm's findings can be challenged from an objectivity and  statistical perspective because of its unique practice protecting whistleblowers, and its use of an incredibly small sampling of individuals employed in the financial services industry (250 respondents vs. a Department of Labor estimate of over 800,000 persons employed in the securities and investment sector in the US at the end of 2011), the Firm's results are still very disappointing:

Moreover, only 36% of respondents felt that the culture of Wall Street had improved since the passage of Dodd Frank.

Why is Gordon Geko still among us? According to Labaton Sucharow's findings, 26% of respondents believe that firms' compensation or bonus plans encourage employees to engage in unethical or unlawful conduct.

Again, the Firm only surveyed a small number of financial services professionals and itself, specializes in representing whistleblowers, but these results are still disturbing – particularly when considered year to year.

Most financial services firms have strong codes of conduct and ethical standards, conduct regular training of their employees, and recognize that while it takes a long time to build a reputation, it can be sullied very quickly. Ultimately clients will not do business with firms they do not trust.

However, at a minimum, financial services firms must continue to fine tune their codes of conduct and ethical standards, and enhance mandatory periodic training to ensure that these are not simply words on a page, but part of each firm's imbedded culture. Compensation must be structured not only to reward contributions to a firm's bottom line and to penalize bad behavior, but to encourage ethical behavior too – in quantitative ways that employees understand in advance.

For more information, see
http://www.labaton.com/en/about/press/Wall-Street-Professional-Survey-Reveals-Widespread-Misconduct.cfm

The information contained in this article is not legal advice. For legal advice, please consult with your attorney. The information in this article is derived from sources believed to be reliable as of July 16, 2013, but no representation or warranty is made regarding the accuracy of any statement. To ensure compliance with requirements imposed by U.S. Treasury Regulations, Gary DeWaal and Associates LLC informs you that any U.S. tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Gary DeWaal and Associates may represent one or more entities mentioned in this article.


© 2019 Gary DeWaal and Associates LLC | 1 (212) 382-4615 | 1180 Avenue of the Americas, Suite 809, New York, NY 10036