Wall Street Ethics

The first basic question which must be asked has to do with the special circumstances of Wall Street: Is Wall Street so different from other areas of American capitalist enterprise? Is not corruption as much a part of every other facet of American business activities as it is a part of Wall Street? The answers to these questions might have some light shed on them by referring to a famous bank robber who was asked why he robbed banks. He said he robbed banks because that was where the money was. The same can be said of Wall Street --- it is an especially corrupt realm because there is so much money there. The men and women who operate on Wall Street are not necessarily more corrupt than men and women working in other realms, but the presence of incredible amounts of money, and the possibility of making fortunes in a relatively brief time create temptations which are greater than exist in perhaps any other area of American capitalist activity.

The risks and temptations which lead to unethical behavior on Wall Street, says Stone, are intensified by the speed of transactions and by the desire for big profits as quickly as possible. As Stone writes, "The most bizarre aspect of Wall Street is that it has managed to attract the best and the brightest to the challenge and then forc

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ich sanitizes the deal so that the risks of the man-on-the-street are camouflaged from the trader. It is easier, in other words, to engage in unethical behavior if the potential loser is a large corporation or a bank than it would be if the potential loser were an individual with a name and a family and a house. Lewis writes: "The problem was more fundamental than a disdain for Middle America. Mortgages were not tradable pieces of paper; they were not bonds. They were loans made by savings banks that were never supposed to leave the savings banks. A single home mortgage was a messy investment for Wall Street . . . . No trader . . . . wanted to poke around suburbs to find out whether the homeowner to whom he had just lent money was creditworthy. For the home mortgages to become a bond, it had to be depersonalized. At the very least, a mortgage had to be pooled with other mortgages of other homeowners" (Lewis, 1990, p. 85). The "customer" of Wall Street does not understand that his own financial well-being is not always the priority of the firm with whom he trades. For example, when the interests of the firm and the interests of the customer clash, the firm will always sacrifice the customer to achieve its own desired end
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Approximate Word count = 4043
Approximate Pages = 16 (250 words per page)

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