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  • Tracking Attitudes toward Financial Institutions & Their Executives – Top 10 Insights

    In light of the recent Supreme Court’s refusal to consider the Newman insider trading decision, DOAR reflects on the evolution of public perception toward financial institutions since its 2013 research study was published.

    The Headlines:

    • Anger toward financial institutions has led to widespread views of a corrupt financial system
    • Allegations of corporate wrongdoing in other sectors (such as the Volkswagen emissions testing scandal) will increase the public’s belief that there is widespread corruption in the financial sector 
    • A generally grim view of the financial sector persists
    • Widespread belief that corporate wrongdoing continues to go unpunished
    • Dramatic increase in whistleblower cases as populist anger at corporations rises

    What it means for Clients:

    • Risk of negative jury findings and high damages awards persists
    • Early assessment of issues and key company witness outcomes via focus group research is crucial for managing outcomes
    • Focus on key witness preparation and likely witness/jury interaction is more essential than ever – and should be started earlier in the process
    • Executives of financial institutions face heightened risk in regulatory and criminal proceedings and need to consider how to address this risk
    • More work to be done in public education and re-alignment of public-facing /brand-building activities

    We have been particularly interested in monitoring these views of financial institutions and parties as the country and the economy have emerged from the financial crisis that began in 2007. Here we provide our insights into how the current audience (juries, arbitration panels and judges) tends to view financial institutions, financial executives and propensity for white collar corrupt behavior at baseline.

    • Reaction to allegations of white collar fraud in the Southern District of New York (SDNY) has tended to follow political and societal trends for the country as a whole. As a whole, societal anger about the financial crisis moved from being against specific targets to being about broader systemic issues. For example, during the financial crisis, Occupy Wall Street and related protests focused white hot anger at specific powerful targets such as “The One Percent” who were seen as harming the rank-and-file members of society. Meanwhile, the Tea Party movement from the opposite extreme of the political continuum focused their anger at the so-called powerful elites who were similarly seen as harming and disregarding the will of the regular people.
    • Now that we have moved a few years out from the crisis, these angry outbursts from different segments of society have developed into broader populist anger at systemic problems in the country such as a more entrenched income inequality.
    • In tandem with this shift in popular focus, the type of litigation that is covered in the media to the extent that ordinary citizens without specific interest in legal issues gain awareness has shifted from a series of high profile insider trading Wall Street cases to cases of political and business corruption, including revelations that previously trusted firms like General Motors and Volkswagen have knowingly hidden safety hazards from their own customers. In addition, the general public has learned more about financial insiders blatantly manipulating the financial system, as seen in the reporting on Tom Hayes allegedly pulling various puppet strings to manipulate the Libor rate at his whims.
    • In keeping with these upswellings of sentiment, we have seen lay people in the SDNY, by their behavior and their description of their feelings, express anger more aimed at the broader financial system than at specific targeted parties.
    • More widespread fundamental beliefs in the corruption of the financial and political system as a whole have emerged. There is more resignation than anger, and more assumptions that financial executives and firms are routinely working in cahoots against the public in a broken system.

    The Outlook From the SDNY

    This generally pessimistic view of banks, hedge funds, private equity firms and the people who work for them may sound like a particularly bad baseline for a financial institution in a legal case before a judge, jury or arbitration panel, but the SDNY has not been a cuddly, welcoming environment for some time. Despite Manhattan being Wall Street’s company town in which many jurors and judges have connections to finance workers, financial institutions have not had an easy time in court since the start of the financial crisis. Financial institutions and their employees, one after another, have received unfavorable verdicts.

    It is unsurprising that at the same time, there has been a sudden rise in whistleblower litigation, encouraged by the Securities and Exchange Commission, featuring insiders alleging misdeeds from within their financial institutions. This focus on a broken system though also may be partly behind the recent statements by the Department of Justice that they will be shifting to focusing more on prosecuting individuals rather than institutions.

    DOAR Research on Attitudes toward Financial Institutions

    For over two decades, DOAR has researched and monitored the view of financial institutions from the heart of our home turf, the SDNY. After taking part in hundreds of trials, interviewing thousands of jurors and research participants, and watching thousands of mock jurors deliberate through two-way mirrors, we have tracked the attitudes toward financial institutions and their executives evolve as the markets ebb and flow.

    A presentation of DOAR’s research, findings and recommendations is available to financial institutions and their counsel by consulting with a member of the DOAR team. Contact David Kinnear at (212) 235-2732 or email: for more information.


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