1Wall Street in Crisis: A Perfect StormA Survey of the US Financial Services Industrywww.secwhistlebloweradvocate.com
As we share the results of our second annual survey of the US financial services sector, andapproach the third anniversary of the passage of the Dodd-Frank Wall Street Reform andConsumer Protection Act, we are mindful that much has changed on ‘The Street.’To be sure, over the last decade, scandal and corruptionhave eroded public faith in the markets. We havewitnessed the global economy in precipitous decline,leaving a casualty trail from seemingly impenetrableinstitutions like Lehman Brothers, to small businesses andeveryday individuals who have lost jobs, homes andretirement savings.We have hoped for, and worked toward, a better future.Governments around the world have enacted aggressivereforms to ensure greater transparency andaccountability. Corporate behemoths and financialinstitutions have taken a more judicious approach to riskmanagement. Industry leaders have made promises toemployees and the public at large–promises about ethicsand responsibility. But the reality is, we now face amoment of unparalleled crisis; many of these promiseshave gone unfulfilled and if we don’t take swift collectiveaction, the battle cry
this can’t happen again
will benothing more than background music to the next, morepotent economic tsunami.In this second annual survey of the US financial servicessector, we uncovered astonishing data about the state of our markets and, notably, an abject decline in the threeforces that, individually and together, have the power toserve as safety nets for the economy: individual integrity,leadership and corporate culture. A particularly troubling and consistent finding throughoutthe survey is that Wall Street’s future leaders–the young professionals who will one dayassume control of the trillions of dollars that the industry manages—have lost their moralcompass, accept corporate wrongdoing as a necessary evil and fear reporting this misconduct.This is a ticking economic time bomb that responsible organizations must immediately defuseor pay a heavy price.One sign of hope was the heightened confidence in the regulatory authorities that oversee thefinancial marketplace. For several years, it has become popular to criticize financial regulators.Now, as a result of leadership changes, organizational reforms and a more aggressiveenforcement approach, financial services professionals have greater confidence in theseorganizations’ ability to effectively and efficiently police the marketplace. We predict thatindustry confidence will continue to grow as awareness of the SEC Whistleblower Programgrows and the program’s successes are made public. Ironically, for an industry that almostuniversally calls for less government, financial regulators appear to be the only place whereWall Street professionals place real faith.
A particularly troublingand consistent findingfrom our survey is
whatthe future holdsfor Wall Street
Many of the youngprofessionals who willone day assume controlof the trillions of dollarsthat the industrymanages have lost theirmoral compass, acceptedcorporate wrongdoing asa necessary evil and fearreporting misconduct.This is a ticking economictime bomb thatresponsible organizationsmust immediately defuse.