No Pay Without Crime

Apparently it is a common view amongst financial services folks that they cannot be successful without committing crimes.

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.

And this is just the folks who were, paradoxically enough, honest enough to admit it. Probably the true number is much higher. This study is certainly consistent with the continuing stream of frauds that are being uncovered.

Edit: Bloomberg suggests that business schools are incubators for criminals:

They perceived any failure to commit a high-benefit crime with a low expected cost as a failure to act rationally, almost a proof of stupidity.

And there lies the rub. Given a nearly zero probability of being caught and punished, financial crime pays – a lot. And what you pay for, you get. So long as regulation is, as it is in the U.S., both indolent and corrupt, nothing will change.

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