In a nice speech a few years ago about the importance of tone at the top for setting ethical standards in banks, Stephen Cutler then a respected regulator at the SEC said:

“Human nature being what it is, there will always be those who break the rules. But if managers don’t do enough to prevent those violations, or let them go unaddressed for too long, then they should be held responsible.”

The New York Times notes the irony that Stephen Cutler has been JP Morgan’s general counsel and head of compliance and that much of the bank's recent troubles happened on his watch. (At JP Morgan, Trying to do the Right Thing Isn’t Enough, September 20, 2013)

The Times quotes Donald Langevoort, a professor at Georgetown University School of Law:

“No one will say this, but it’s more effective to run the risk of noncompliance and pay a few fines, which is just a cost of doing business.”

Too bad about the taxpayer, when this behavior runs amok across the industry.