Before examining particular ethical standards, a short history lesson is in order. Many of the ethical standards which apply to your everyday dealings have evolved over time. The history of the financial services industry makes clear why the industry is so concerned with ethical standards and why it is so heavily regulated.
American stockbrokers trace their ancestry to the English stock jobber. Unfortunately, their reputation was not always good.
Daniel Defoe’s “Villainy of Stock Jobbers Detected” exemplified the public’s perception, as did Dr. Johnson’s dictionary definition of a stock jobber as a low wretch who makes money by buying and selling shares in a fund.
Indeed, a statute was actually passed in England that was entitled “An Act To Prevent The Infamous Practice of Stock Jobbing.”