Are Women More Honest Than Men in Finance?

Are Women More Honest Than Men in Finance?

First, the world was talking about Bernie Madoff. Last year, the big insider trading personality was Raj Rajaratnam. Now, we have Russell Wasendorf, who brings a small-town melodramatic storyline to the newest financial scandal.

Wasendorf, the owner of a brokerage in Cedar Falls, Iowa, called Peregrine Financial Group, attempted suicide last week amid allegations of fraud—he was found in his car with a hose running from the tailpipe. Later in the week, after being brought to a hospital to recover, he was arrested … that is, after he admitted to embezzling at least $100 million.


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In many ways, Wasendorf was a hometown hero, one of the big employers in Cedar Falls who was also known for his charity work.

It must be shocking to find out that someone who seems so kind and charitable is secretly engaging in fraud, right?

Surprising, definitely. But the news around Wasendorf has gotten us thinking in a somewhat unusual direction: What if he were a woman?

Are Men More Willing to Cheat (Financially)?

As odd as that question might sound, a new survey of financial service professionals found that almost a quarter of participants believed people in finance might sometimes “need to engage in unethical or illegal conduct in order to be successful.”

The study asked these financial services professionals whether they’d consider insider trading if they stood to make $10 million and had no risk of getting arrested. 45% indicated that there was at least some chance they’d do it!

Among those who said they’d do it, 19% of male financial services professionals were willing to engage in insider trading under those circumstances, compared to 10% of females.

Does that mean women are more honest?

There could be a reporting bias in this study—in other words, are men more willing to cheat, or are they more willing to admit that they’d cheat?

All the same, even if women are secretly just as willing to engage in insider trading but more hesitant to admit it to researchers (and themselves), that still indicates to us that they place a social premium on being perceived as “honest.”

As for whether that actually impacts their actions …

The Most Notorious Insider Trading Scandals

Perhaps the most notorious recent inside trader is Raj Rajaratnam, who was sentenced to 11 years in prison, a record sentence. Last year’s crop of inside traders also included Major League Baseball player Doug DeCines.

In all, the SEC brought at least 65 inside trading actions in 2011 and the beginning of this year … but of those the regulatory body holds up as examples in its documentation, none of the ringleaders are women.

Certainly, women do corrupt things, too. There’s Martha Stewart, and this woman who apparently got insider trading secrets through pillow talk with her boss. And, definitely, part of the reason there are so few female fraudsters is in large part because there are way fewer women in positions of power to pull off a huge Madoff- or Raj-esque scheme.

But as we applaud more and more women rising to positions of power, we wonder—would more women commit fraud if only they had the opportunity?

What do you think—is it a question of men simply having more opportunity to commit fraud? Is it social norms that hold women back from using fraud to make money? Is it something else?


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