Wealth Makes You Unethical - So Says Science

A recent study, announced Feb. 27th in the Proceedings of the National Academy of Sciences, examining the relationship between soioeconomics and ethics, shows that as a person's wealth and status rise, so does their tendency to be unethical.  This overall study entailed seven various experiments ranging between controlled experimental environments, as well as real life uncontrolled environments.

According to Psychologist Paul Piff of the University of California, Berkeley, he stated: “Occupying privileged positions in society has this natural psychological effect of insulating you from others. You’re less likely to perceive the impact your behavior has on others. As a result, at least in this paper, you’re more likely to break the rules.”

He went on to say that ,“When pursuit of self-interest is allowed to run unchecked, it can lead to socially pernicious outcomes.”

For more details of the seven experiments that made up this overall study, click here

 

See What Others Are Saying About Fraud This Month...

This month's survey question to Keep Your Eye on Fraud members is - Why Hasn't The Government Prosecuted Anyone for The 2008 Financial Recession? See what our member are saying on LinkedIn by clicking here now

 

JP Morgan - "Release The Clawback..."

In light of the recent investment fiasco, which has resurfaced memories of 2008, the biggest U.S. bank, JPMorgan Chase & Co. (JPM), is considering reclaiming incentive pay from employees. This clawback includes former CIO Ina Drew, after her unit had a $2 billion trading loss.

The bank can decide to cancel stock awards or even demand they be repaid if an employee “engages in conduct that causes material financial or reputational harm,”. The company will claw back pay if it’s appropriate, said one of the executives, who asked not to be identified because no decisions have been made.

Drew didn’t respond to phone and e-mail messages seeking comment. Nevertheless, the trading loss has hurt JPMorgan’s reputation. Dimon was quoted as saying in a conference call last week. It “puts egg on our face and we deserve any criticism we get,” he said.

However, can Dimon truly claim plausible deniability? Did he really not know what investments were being made in the bank’s corporate division, under which Drew reported, which earned a peak of $3.7 billion in 2009?

 

There's no such thing as good money or bad money. There's just money.

Lucky Luciano

2012 Report to the Nation on Fraud

The most recent publication of the Report to the Nations on Occupation Fraud and Abuse has been released by the Association of Fraud Examiners (ACFE). The ACFE's 2012 Report to the Nations on Occupational Fraud and Abuse is based on data compiled from a study of 1,388 cases of occupational fraud that occurred worldwide between January 2010 and December 2011.

All of the information gathered in the report was provided by the Certified Fraud Examiners (CFEs) who investigated those cases. Click here to proceed to the ACFE's website where you can download a PDF version of the report.