Almost one-third of Britain’s financial-services workers are aware of illegal behavior at their companies, and many fear reporting it, a survey by the securities litigation law firm Labaton Sucharow LLP found.
Of 500 senior professionals questioned last month, 30 percent in the U.K. and 22 percent in the U.S. said they had witnessed or had “first-hand” knowledge of wrongdoing, the law firm said today in a statement. Almost 4-in-10 believe their competitors break the law to get ahead, the firm said.
The study focused on corporate ethics, the regulatory landscape and individuals’ willingness to report illegal behavior, the New York-based law firm said. It comes amid U.S. and U.K. probes into whether banks rigged the London interbank offered rate and follows a record 290 million-pound ($450 million) fine for Barclays Plc. (BARC)
“It is shocking that four years after the global economic crisis began there continues to be a fundamental lack of integrity in the financial services industry,” Dominic Auld, a lawyer at Labaton Sucharow, said in the statement.
The survey shows that 30 percent of workers believe their compensation or bonus plans put pressure on them to compromise ethical standards or break the law, the firm said. An equal number said regulators and law enforcement agencies don’t effectively deter such behavior, the report said.
Almost all respondents said they would report illegal activity if they had whistle-blower protection. Only about one- third in the U.K. and half in the U.S. knew the U.S. Securities and Exchange Commission and the U.K.’s Serious Fraud Office’s SFO Confidential program provided such protections, the firm said.
Eighteen percent of U.K. respondents and 15 percent in the U.S. said they would engage in illegal insider-trading if they thought they could get away with it, said the law firm, which often represents investors or others suing companies.
“Wrongdoing in the workplace cannot ever be condoned,” Brian Capon, a spokesman for the British Banker’s Association in London, said in an e-mail. “Our members have processes so staff concerned about aspects of behavior and conduct can raise these at the appropriate level in their organization.”
The law firm’s survey didn’t mention the Libor probe, which cost Barclays Chief Executive Officer Robert Diamond his job. Other recent scandals originating in London include JPMorgan Chase & Co.’s trading loss of at least $2 billion in May and UBS AG’s $2.3 billion loss last year.
Libor is calculated from a daily survey carried out for the BBA, in which the world’s biggest lenders are asked the rate they’re charged to borrow over a variety of short-term maturities in several currencies.
Labaton Sucharow’s six-day online survey queried directors, senior managers, managers, senior analysts and financial analysts.
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