Is it hard to be ethical on Wall Street? As a motivational business ethics speaker, business ethics consultant and book author, I can turn the conversation around and ask, “Is your repair shop ethical? Your doctor’s practice? Your local supermarket? Your bank?”
Not the domain of Wall Street
Despite the movies and television series, the talk shows and, of course, cable news and the 24/7 news cycle, to say that “Wall Street” per se, is unethical is a fallacy. To believe that the investment community is lacking in corporate social responsibility and business ethics is entirely an argument without merit.
As with any industry, there are terrible players to be sure; there are also highly ethical, decent people trying to do their best to make money for their firms, themselves and their clients. In fact, I find the term “Wall Street” a misnomer. Wall Street, the clacking, cluttering, digital explosion of high’s, lows, charts and screaming traders, is often the end-result. The numbers are not evil, rather the ethical or unethical people behind the numbers. Wall Street is simply a street with buildings and people who work there.
The ethical soul of the business is in the collective of thousands of firms selling, buying and trading products and services that are offered.
As a business ethics speaker and business ethics consultant, I need to carefully dissect this point.
On NASDAQ alone, there are more than 3,000 companies; the New York Stock Exchange boasts about 2,800 companies. I am not even delving into the world of “penny-stocks” nor the foreign exchanges. Then there are bond houses and commodity traders (including options), brokerage firms, independent financial service agents, stockbrokers and investment advisory firms.
In the space of this post, I cannot generalize about anyone. However, this I know: there have been highly unethical, “software,” “green energy” and “natural products” companies. There have also been highly ethical energy, banking and pharmaceutical companies. To generalize is always wrong. Therefore, when I hear someone ask “Is it hard to be ethical on Wall Street?” my response is invariably, “Which firm are you referring to?” or simply: it depends.
Where is the separation?
When the fictional Gordon Gekko of the movie Wall Street uttered the infamous line of “Greed is good,” the character came to define an image of an unethical industry where everyone was corrupt and prayed at the deity of money. It was a popular movie, and the message was embraced.
However, it is instructional to watch the movie again, albeit the fact that it is dated, and note characters in the background who warned the main protagonists that there is indeed a price to be paid for unethical behavior. And it came to pass. Unethical people went to jail; the SEC shut the company down; people were thrown out of work and fines were levied. Every unethical choice had consequences.
The separation is ethics. There are those who cave-in, and others who rise above. There are those for whom greed is the only purpose, and others who believe in their corporate mission, hire good people, and try their best. Companies being traded on Wall Street are a mixture of good and bad. It depends.
Incidentally, I started this blog asking about repair shops, local banks, medical practices and supermarkets. In 2022 alone, there have been numerous penalties imposed against key players in all of those industries. It is ethics.
Pressure
Some financial firms are pressure-cookers. Their people feel pressure to sell poor products and to push investors into poor stocks and bonds and other financial instruments. There are also medical practices over-prescribing, over-charging for services, issuing fake vaccination cards and violating HIPAA rules.
Unethical behaviors are not endemic to any industry. Unethical companies attract unethical people. This is where due-diligence is mandated.
Someone, somewhere along the line might have looked at Bernie Madoff’s firm and asked, “Is this kind of return consistently possible?” Someone, somewhere along the line putting their money into Theranos might have asked, “Is what Elizabeth Holmes is promising even possible?” In both cases, clear-cut warnings were sounded. Common sense was replaced by greed.
Is it hard to be ethical on Wall Street? It depends.
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