A recent report by Labaton Sucharow suggests that many young people coming into finance regard corporate wrongdoing as the cost of doing business.  Here are the main points of the report.

• Despite the many reforms put in place in the wake of the financial crisis, only 36% of respondents felt that Wall Street has changed for the better since Dodd-Frank’s passage in 2010.

• More than half of respondents–52%–felt it was likely that their competitors have engaged in unethical or illegal activity to gain an edge in the market; 24% felt employees at their own company likely have engaged in misconduct to get ahead.

• Misconduct is still widespread in the financial services industry; 23% of respondents indicated that they had observed or had firsthand knowledge of wrongdoing in the workplace.

• 29% of respondents believed that financial services professionals may need to engage in unethical or illegal activity in order to be successful.

• More than one-quarter of all financial services professionals–26%–believed the compensation plans or bonus structures in place at their companies incentivize employees to compromise ethical standards or violate the law.

• An alarming number of financial services professionals, 24% of respondents, likely would engage in insider trading to make $10 million if they could get away with it.

• Shockingly, and consistent with recent and high-profile criticism of the culture within the financial services industry, a full 28% of respondents felt that the financial services industry does not put the interests of clients first.

• Building on this seemingly endemic culture problem, a concerning number of financial services professionals indicated that their leadership may put profits above ethics; 17% felt their leaders were likely to look the other way if they suspected a top performer engaged in insider trading. Equally concerning, 15% doubted that their leadership,upon learning of a top performer’s crime, would report it to the authorities.

• As enforcement actions are on the rise and new reforms have strengthened financial regulators and law enforcement authorities, the court of public opinion is following suit; 62% of financial services professionals felt the SEC is an effective watchdog and 57% felt that FINRA is effective.

• Despite the encouraging 89% of financial services professionals who indicated a willingness to report wrongdoing given the protections and incentives such as those offered by the SEC Whistleblower Program, 40% of respondents were still unaware of the SEC’s Whistleblower Program. Financial Services Survey July 2013