Abstract This study investigates the question: Do investment banks, because of their internal culture, lend themselves to the acts of fraudulent behaviors by some employees? This question is investigated through the testing of a related hypothesis. The HoHA research approach is followed in the formulation and testing of the hypothesis. The hypotheses are as follows:
Ho: There is no relationship between investment banking culture and acts of fraudulent behavior on the part of some employees of investment banks.
HA: The investment banking culture both facilitates and encourages some employees of investment banks to engage in acts of fraudulent behavior.
The hypothesis is tested and the research question is investigated through a review of high profile event in the investment banking industry over the past few decades. Investment banking is reviewed briefly in the following section, and this review is followed by a review of investment banking culture as reflected in selected high profile cases, including those of Michael Milken, Ivan Boesky, Nicholas Leeson, and Toshihide Iguchi.
From the Paper "The major operational functions of investment banking firms are underwriting, dealing, brokerage, and the provision of financial advice. The underwriting function involves origination, risk bearing, and distribution. Origination is concerned with defining the essential characteristics of an investment offering (debt or equity, pricing, timing, method of distribution, and so forth). Risk bearing on the part of an investment bank involves the purchase by a bank at a fixed price of a new securities issue, for eventual sale to the investing public (Pugel & White, 1995). In this context, the investment bank is at risk until the new issue is sold. Distribution is the act of selling the issue to the investing public. The provision of financial advice accompanies the underwriting function, although financial advice is also provided in other instances, such as, in conjunction with merger and acquisition decisions."
Abstract High profile instances insider trading, so-called rogue trading, and other illegal activities occurring in the financial markets frequently raise questions about why or how such actions take place.
From the Paper "Investment Banking Culture and Fraud
Introduction
High profile instances insider trading, so-called rogue trading, and other illegal activities occurring in the financial markets frequently raise questions about why or how such actions take place. While many opinions have been offered, no definitive answer has emerged.
This study investigates the question: Do investment banks, because of their internal culture, lend themselves to the acts of fraudulent behaviors by some employees? This question is investigated through the testing of a related hypothesis. The HoHA research approach is followed in the formulation and testing of the hypothesis. The hypotheses are as follows:
Ho: There is no relationship between investment banking culture..."
From the Paper "This study will present an investigation of ethics on Wall Street, focusing on the decidedly unethical behavior involved in cases featuring the Salomon Brothers, Michael Milken, and Ivan Boesky.
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..."
From the Paper "When Michael Milken, Ivan Boesky, Martin Siegel and Dennis Levine were arrested and prosecuted, the media and the public perceived the issue to be the esoteric insider trading. The various defendants were charged with crimes that most Americans did not understand, shrouded as they were in the area of high finance, hostile takeovers, junk bonds and mergers and acquisitions. The public did understand the level of some of the fines imposed on the defendants, fines which reached into the hundreds of millions of dollars, but the actual charges were never fully explained or comprehended by the public at large. James B. Stewart, an editor for the Wall Street Journal, examines the insider trading scandal and exposes a series of events that hinged not merely on insider trading, but which paint a picture of greed and predatory tactics unmatched in the history of the,,,"
