25% of Wall Streeters worry they've signed contracts that would prevent them from turning in the new Madoff
Mario Tama/Getty ImagesThe SEC tried to incentivize tipsters after the financial crisis. But big bosses noticed, and confidentiality agreements have hampered investigations.One in four financial service sector employees have signed, or have been asked to sign, confidentiality agreements that they say prevent them from blowing the whistle on illegal activity in the workplace, according to a survey released Tuesday.
The practice might not be part of Wall Street culture for long.
Earlier this year, the SEC cracked down on one company that forced employees to sign what it called "restrictive" non-disclosure agreements.
It's part of an ongoing back-and-forth between financial services firms and the Securities and Exchange Commission, which, in the wake of scandals like Bernie Madoff's ponzi scheme, sought to better incentivize cooperation from tipsters.
The survey, conducted by law firm Labaton Sucharow and the University of Notre Dame, highlights confidentiality agreements that may be unenforcable becoming common on Wall Street and elsewhere in the financial services sector. Their survey quizzed more than 1,200 financial services employees in the US and the UK.
