Business culture and dishonesty in the banking industry

By Alain Cohn, Ernst Fehr & Michel André Maréchal
Nature (2014) doi:10.1038/nature13977
Published online 19 November 2014

Abstract

Trust in others’ honesty is a key component of the long-term performance of firms, industries, and even whole countries. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry. Contemporary commentators have attributed these scandals to the financial sector’s business culture, but no scientific evidence supports this claim. Here we show that employees of a large, international bank behave, on average, honestly in a control condition. However, when their professional identity as bank employees is rendered salient, a significant proportion of them become dishonest. This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient. Our results thus suggest that the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important.

The article can be found here.

The Crazy Things That One Whistleblower Says Are Happening At JP Morgan Will Blow Your Mind

By Michael Snyder

Hawaii News Daily

Originally published March 16, 2012

Rampant silver manipulation? 

Rampant gold manipulation? 

Rampant LIBOR manipulation? 

Hiding MF Global client assets? 

These are all happening at JP Morgan according to an open letter reportedly written by an anonymous employee of the firm.  The whistleblower also warns of a "cascading credit event being triggered" by derivatives related to Greek government debt. 

Unlike Greg Smith at Goldman Sachs, this whistleblower has chosen to remain anonymous for now.  According to the letter, the whistleblower is still an employee of JP Morgan and has not resigned.  But that does make it much more difficult to confirm what he is saying.  With Greg Smith, we know exactly who he is and what he was doing at Goldman.  As far as this anonymous whistleblower is concerned, all we have is this letter.  So we must take it with a grain of salt.  However, the information in this letter does agree with what whistleblowers such as Andrew Maguire have said in the past about silver manipulation by JP Morgan.  And this letter does mention Greg Smith's resignation from Goldman, so we know that it must have been written in the past few days.  Hopefully this letter will cause authorities to take a much closer look at the crazy things that are going on over at JP Morgan and the other big Wall Street banks.

This anonymous letter was addressed to the CFTC, but unfortunately it looks like the CFTC has already chosen to ignore it.

The original letter from this anonymous whistleblower has already been taken down from the CFTC website.  When you go there now, all you get is this message....

"The Comment Cannot Be Found. Please Return to the Previous Page and Try Again."

Fortunately, there are many in the alternative media that copied this entire letter from the CFTC website.

The entire story is here.