Wall Street’s top prosecutor just schooled a room full of New York bankers on bad behavior.
Preet Bharara is greatly feared on Wall Street. As the U.S. attorney for the Southern District of New York, Bharara has prosecuted dozens of high profile bankers on insider trading and securities fraud.
He said the key ingredient to fixing big banks’ terrible tendencies is to create a culture of integrity. And all too often it’s lacking, Bharara said Thursday at the New York Federal Reserve’s annual conference on banking culture.
“Everyone from the mail room to the board room needs to feel it in their bones, that the bosses care about integrity,” he argued.
Bharara said it isn’t enough for financial firms to just check the boxes and say they comply by the rules. There needs to be an overarching sense that honesty, integrity and transparency are behind a company’s framework.
He said the most toxic culture is one of silence. Bharara sees it across many of his cases, not just on Wall Street but also on drug dealers, crooked cops and terrorists. He pressed the audience not to “look the other way, to conform.”
His speech followed remarks earlier in the day by New York Fed President William Dudley who said big bank had lost their credibility with the public after years of “deep-seated cultural and ethical problems.”