It is often said that it is unfair to paint an entire industry with a broad brush, and it is. There are clearly good people out there doing good work. A large majority falls in that category. But the numbers presented in the report reflect an unsettling reality that there may be more than just a few bad apples in the industry, too. It should be considered a red flag when insiders say this: "28 percent of respondents felt that the financial services industry does not put the interests of clients first."
Perhaps oddly, the problem is most pronounced among the youngest employees in finance, the next generation of leadership on Wall Street.
Remember the question about whether an executive would commit insider trading for $10 million if there were no repercussions? Well, if you parse the numbers by seniority in the industry, respondents with under 10 years of experience were even more likely to break the law: 38 percent said they would commit insider trading for $10 million if they wouldn't be caught.
That result is particularly striking since I would have expected the next generation of financiers to be the most interested in helping to build a new, anti-Gordon Gekko culture on Wall Street.
Virtually every top M.B.A. program in the country now teaches ethics classes, many of them required. In 2008, a coalition of students started the MBA Oath, a voluntary pledge among students to "create value responsibly and ethically." So far, more than 6,000 students have signed the pledge.
And yet, the report and other anecdotal evidence suggest that whatever is being done both in the classroom and on the job is not enough. According to a controversial study called "Economics Education and Greed" that was published in 2011 by professors at Harvard and Northwestern, an education in economics surprisingly may be making the problem worse.
"The results show that economics education is consistently associated with positive attitudes towards greed," the authors wrote. "The uncontested dominance of self-interest maximization as the primary (if not sole) logic of exchange, in business schools and corporate settings alike, may lead people to be more tolerant of what other people see as morally reprehensible."
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The problem is compounded by a trait shared by everyone, no matter their industry. "People predict that they will behave more ethically than they actually do," according to a 2000 study led by Ann E. Tenbrunsel, a professor at Harvard. "They then believe they behaved ethically when they didn't. It is no surprise, then, that most individuals erroneously believe they are more ethical than the majority of their peers."
That may help explain why, in the Labaton Sucharow report, 52 percent said they "believed it was likely that their competitors have engaged in illegal or unethical activity in order to be successful."
It may also explain why 89 percent of respondents "indicated a willingness to report wrongdoing" yet so few do.
As part of the Dodd-Frank financial overhaul law, the S.E.C. developed a $500 million whistle-blower program that pays 10 to 30 percent of penalties collected to the whistle-blower. The fund still has some $450 million in it, despite recent remarks by Stephen L. Cohen, associate director of the S.E.C.'s enforcement division, that we should expect bigger payouts soon. Mr. Thomas of Labaton Sucharow helped develop the whistle-blower program when he was at the S.E.C., and he now represents whistle-blowers.
"We are seeing a culture of silence," he said. "There's an unwillingness to come forward."
Greed, for far too many, is still good, apparently. There's still much work to be done before the catchwords become the culture.
—By CNBC anchor and New York Times columnist Andrew Ross Sorkin