A phenomenon that has emerged in the financial services industry in recent years is the notable shift in ethical standards.
Conduct that was merely frowned on in past years is now being viewed as unethical or even illegal. Conduct that would have been handled by the SEC solely as a civil matter is now being referred to the U.S. Attorney’s office for criminal prosecution.
The amount of fines and penalties have been steadily increased and long prison sentences are now not unusual for white collar crimes. The U.S. Attorney offices in most major cities also have special sections devoted to securities related crimes.
This all makes the adherence to the highest ethical standards even more important. An example of shifting ethical standards are recent SEC rules on political contributions by municipal bond underwriters. Although such practices have long been associated with municipal underwritings, the SEC has now condemned such payments.