Nearly a quarter of Wall Street respondents believe it is likely that fellow employees have engaged in illegal or unethical activity in order to gain an edge, according to a new survey — and that this is only becoming more common.
Law firm Labaton Sucharow found that the 23 percent figure is nearly double the 12% that reported as such in 2012. The figure jumps to 34% for those earning $500,000. The firm surveyed 1,223 U.S. and U.K. financial firm employees by email between December and January.
"Nearly seven years after the global financial crisis rocked investors’ confidence in the markets and financial services in general, our survey clearly shows that a culture of integrity has failed to take hold," the firm says in their report. "Numerous individuals continue to believe that engaging in illegal or unethical activity is part and parcel of succeeding in this highly competitive field."
Some of this may be explained by a keeping-up-with-the-joneses effect: 47 percent of respondents find it likely that their competitors have engaged in unethical or illegal activity, a spike from the 39 percent who reported as such when surveyed in 2012.
The 2014 figure jumps to 51 percent for individuals earning $500,000 or more per year.
And nearly one in five respondents "feel financial services professionals must at least sometimes engage in illegal or unethical activity to be successful."
But they also found a culture of silence in the face of wrongdoing continues to prevail: One in 10 respondents said they have signed or have been asked to sign agreements that "specifically prohibits reporting potential illegal or unethical activities directly to law enforcement." For those who make over $500,000 annually, that number rises to 25 percent, the report says. And 19 percent said their employer would likely retaliate against them for reporting wrongdoing.
"When corporate whistleblowers are prohibited, discouraged or retaliated against for reporting crime to cops, we should all be scared—very scared," said Jordan A. Thomas, Chair of the Whistleblower Representation Practice at Labaton Sucharow and co-author of the report.
Wall Street continues to fight regulations like the Dodd-Frank finance-industry reform bill that were put in place after the crisis. The New York Times reported in January that the industry spent $74 million on Washington lobbying in the first three quarters of last year — on a total of 704 registered lobbyists. That compared with $99 million spent in all of 2013 alone.
Whether they are succeeding is not entirely clear, thanks in part to the rising national anti-Wall Street sentiment embodied by Massachusetts Senator Elizabeth Warren. The Times said many of their proposals introduced by finance groups now face a "Warren litmus test."
“If Warren describes something as a gift to corporate industry, you have to kind of walk through that gantlet,” one lobbyist said.
At least one bill calling for a delay in Dodd-Frank’s requirement that banks sell off collateralized loan obligations was defeated in the Republican-dominated House after failed to get the two-thirds majority.
A representative for the Securities Industry and Financial Markets Association did not immediately respond to comment.
Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.