Two senior investment bankers at Bank of America were summoned to a meeting where their boss, visibly uncomfortable and flanked by bank lawyers, read them a statement. They were both dismissed and asked to leave the building immediately. The decision was final.
Stunned, the bankers asked if they had broken any regulations. No, they were told. Nor had they traded on any inside information. Within the hour, they had turned in their BlackBerrys and laptops and were on their way home to the suburbs.
This example illustrates one effect of heightened regulatory scrutiny in the United States after the collapse of Enron and other companies. Corporations and their boards are adopting zero-tolerance policies and increasingly holding their employees to lofty standards of business and personal behavior.
The result is a wave of abrupt firings as corporations move to stop perceived breaches of ethics by their employees that could result in law enforcement action, or public relations disasters.
In the ruthlessly competitive world of investment banking, the two investment bankers at Bank of America had been doing what presumably was their job. Acting on a tip from a rival banker, they had called a company preparing to merge with another and asked to get in on the deal.
In a different era, such a ploy might well have been seen as an example of what hungry bankers do to secure an inside edge with a client and maybe even a better bonus - not an inappropriate use of confidential information and cause for termination.
'We are in a regulatory frenzy,' said Ira Lee Sorkin, a senior white-collar-crime lawyer at Carter Ledyard & Milburn in Manhattan. Read on.