Q: You say in the introduction to Wall Street Noir that Wall Street has long been a crime scene. Why do you think that is?
A: In this day and age — post-Enron, post-Adelphia, post endless insider-trading and conflict of interest cases — it's hardly breaking news that there's crime on Wall Street. Financial wrongdoing didn't start there, of course, but it found fertile ground on the Street, and its roots run pretty deep. As to why — I'm not sure Wall Street criminals are ultimately so different from other varieties: they're some combination of greedy, scared, desperate, and reckless. And of course there's the fact that (to paraphrase Willie Sutton) Wall Street is where the money is. But I think there's more to the story than inclination and proximity.
Pressure is certainly a part of the Wall Street equation. People with P&L responsibility on the Street are under enormous pressure to generate revenue. Success can bring immense wealth, and failure can end careers. For some of these people, more than just run-of-the-mill avarice is at work. For them, money is merely a proxy for larger, more existential stakes. Failure doesn't only put big bonuses at risk, but their sense of self as well.
Corporate culture is another factor. Crime doesn't occur in a vacuum — it's encouraged (on Wall Street or any place else) when supervision is lax, and enforcement and penalties are perceived to be mild. Firms with slipshod controls, or whose managements focus on the generation of revenue to the exclusion of all else, often send ambiguous don't ask, don't tell signals to their employees, and tacit messages about what kind of behavior is and isn't acceptable in the pursuit of profit.
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