So there’s a law firm called Labaton Sucharow and a big chunk of their business model is:
(1) read newspaper,
(2) see bank did bad thing,
(3) sue bank.
This is a great business model because banks just cannot resist doing bad things and courts just cannot resist taking piles of money from shareholders of those banks and divvying it up among other shareholders of those banks and the lawyers who facilitated the transfer. For those same reasons, though, it’s a highly competitive business model and there’s every reason to branch into other related fields. So they did:
Labaton Sucharow was the first firm in the country to establish a practice exclusively focused on protecting and advocating for SEC Whistleblowers. Led by Jordan A. Thomas, a former Assistant Director and Assistance Chief Litigation Counsel in the Enforcement Division who played a leadership role in the development of the SEC Whistleblower Program, our practice leverages unparalleled securities litigation expertise and significant in-house resources to protect and advocate for courageous individuals who report possible securities violations.
This is clever as that is also a lucrative business model but a safer one: unlike securities class actions, where the decision about which lawyers get paid and how much are left to courts and can seem arbitrary to those lawyers, in whistleblower suits you actually find a client and convince him to pay you your fees out of any money he can get. And that money can also be serious money.
The problem though is that you cannot typically get these cases just by keeping a casual eye on the newspaper: banks cannot resist doing bad things, true, but once those bad things are in the newspaper the expected value of whistleblowing is low. The whole point of a whistleblower is that he voluntarily goes to regulators with information that isn’t yet widely known, so your job, as a whistleblowing broker, is to find people who have not yet come forward with their valuable crime information and make them come forward to you. And that is hard. It’s not like you can just contact a bunch of people in senior roles in the UK and US financial industries and say “hey, would you like to talk to us about possible misconduct in your industry?” Right?
Labaton Sucharow LLP today announced the results of its survey of 500 financial services professionals across the United States and United Kingdom. Conducted by Populus in June, Wall Street, Fleet Street and Main Street: Corporate Integrity at a Crossroads reveals startling data on corporate ethics, the regulatory landscape, and individuals’ willingness to blow the whistle on wrongdoing. The survey is being released in conjunction with the launch of the firm’s SEC Whistleblower Eligibility Calculator, an innovative web-based tool to enable users to assess their eligibility for the SEC Whistleblower Program.
According to the survey, 24 percent of respondents reported a belief that financial services professionals may need to engage in unethical or illegal conduct in order to be successful, while 26 percent of respondents indicated that they had observed or had firsthand knowledge of wrongdoing in the workplace. Particularly troubling, 16 percent of respondents reported that they would commit a crime — insider trading — if they could get away with it.
“When misconduct is common and accepted by financial services professionals, the integrity of our entire financial system is at risk,” said Jordan Thomas, partner and chair of the Whistleblower Representation Practice at Labaton Sucharow. “In this era of corporate scandals, we must refocus our energies on corporate ethics and encourage individuals to report wrongdoing—internally or externally.”
There is so much that is amazing about this. Like: they got 500 people to talk to them! (How many people did they ask? Did they tell them who had commissioned the survey? Did they offer a reward for participation? Was the reward “you might get a huge cut of a whistleblower lawsuit”? The answers to those questions are unclear from the report though TBF their pollster seems legit.)
But also: while the process gives you every reason to think those numbers might skew high, don’t they actually seem, well, low? My favorite stat is “Only 41% of respondents reported that staff within their own organization had ‘definitely not’ engaged in unethical or illegal conduct to be successful.” Raise your hand if you are a financial services professional and can say with certainty that no one in your organization has engaged in unethical or illegal conduct to be successful. Everyone at a Libor panel bank, hands down!
But the best part is the media coverage, which plays the results of the survey pretty straight, taking seriously the conclusion that a quarter of Wall Streeters are criminals, but totally elides the point of it, which is to advertise for the concept of whistleblowing generally and for Labaton Sucharow’s “first-of-its-kind SEC Whistleblower Eligibility Calculator” in particular. (Really.) Reporters, it seems, are happy to piggyback on Labaton Sucharow’s work to drum up more stories about financial malfeasance. They just want to keep those stories in the newspapers.
Financial Services Professionals Feel Unethical Behavior May Be a Necessary Evil and Have Knowledge of Workplace Misconduct, According to Labaton Sucharow Survey [Labaton Sucharow]
Wall StreetFleet StreetMain Street: Corporate Integrity at a [Questionably Punctuated - ed.] Crossroads [Labaton Sucharow]
Many Wall Street executives says wrongdoing is necessary: survey [Reuters]
Do You Have To Be Unethical To Succeed? [Slate]
Wall Street Short on Ethics, Report Finds [DealBook]
Breaking: Wall Street’s Morality Not Spotless [DI]