Brits Hope to Curb Risky Banker Behavior With Pay Regulation

There is so much white-collar crime these days that it is no wonder that bankers are joining lawyers among the most distrusted.

From FINS.com:

Finance professionals are just not trusted these days (as seen in this ad from Strongbow Cider), and perhaps with good reason as white collars get hauled off to court with glaring media headlines.

In the latest round, six executives from Sky Capital LLC were indicted by the feds for a $160 million stock fraud.

In a devious scheme, the brokers manipulated shares in Sky Capital to make themselves look more successful than they were, according to Bloomberg News.

Meanwhile, regulators in Britain have decided to curb banker salaries. If a firm’s pay packages promote risky behavior, the Financial Services Authority will force the firm to set aside capital to cover the added risk that the compensation promotes. This is expected to act as a detriment to establishing bonus-heavy pay packages that reward short-term gains.

“We need a change of culture in the banks and their boardrooms, with pay practices that are focused on long-term stability and not short-term profit,” said Alaister Darling in the House of Commons.

The only profession more distrusted currently would be law. The U.S. government today asked for a 145-year sentence for lawyer Marc Dreier, who committed fraud on hedge funds and other investors to a tune of $400 million.

“An Officer and a Gentleman”Veteran trader and Minyanville founder Todd Harrison’s fifth installment of Memoirs of a Minyan details his high-flying days and an epic power struggle in the gold towers of Morgan Stanley. (Minyanville)