Employees of Ernst & Young (EY) decided to cheat on the ethics exam, resulting in a $100 million fine for the company. The Securities and Exchange Commission of the United States issued this announcement. They were lambasted as a “woke corporation” by critics as this story made headlines.
According to a news release from the organization, EY, one of the “big four” accounting firms, confessed that a “significant number” of its employees had cheated on the ethics section of their CPA tests and continuing education programs. The business wasn’t willing to show evidence of this wrongdoing to the officials.
“This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our Nation’s public companies,” said Gurbir Grewal, director of the SEC’s Enforcement Division. “It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things.”
Ernst & Young will be required to “engage in extensive undertakings” in addition to paying a $100 million fine.
Associate Director of the SEC’s Enforcement Division Melissa Hodgman said, “The SEC will not permit the submission of misleading information or any action that delays or frustrates our mandate to protect investors and our markets,” and added. “Ernst & Young faces significant sanctions and extensive remediation to ensure that its culture and conduct meet the ethical standards required of those responsible for the integrity of our capital markets.”
This London-based business joins other companies in condemning racism and pledging support for social justice programs. EY wrote on its website, “EY is taking actions as a U.S. firm to eradicate racism and discrimination by leveraging our influence to drive strategic change in our firm, in the communities where we work, and through public policy.”
EY is not the only left-leaning financial services business to face the consequences of its low ethical standards.
BNY Mellon must pay a $1.5 million penalty for “misstatements and omissions” relating to its Environmental, Social, and Governance (ESG) social responsibility objectives for several mutual funds the investment bank controlled.
The agency revealed that BNY “represented or implied in various statements that all investments in the funds had undergone an ESG quality review” between 2018 and 2021, but “that was not always the case.”
Employees at Wells Fargo revealed that their company staged interviews with minority applicants and women in order to increase diversity numbers. According to the ex-employees, this was an attempt to avoid regulatory audits and artificially support diversity goals.
In 2020, Wells Fargo reached a settlement with the U.S. Department of Labor, agreeing to pay $7.8 million to resolve allegations that the bank discriminated on a racial basis against over 34,000 African-Americans who applied for positions in banking, administrative support and customer sales and service, and over 300 women who applied for administrative support roles.
After George Floyd’s passing, many investment banks united in their goal to support diversity, and Wells Fargo was a part of this.
“This is a painful time for our nation,” Wells Fargo CEO Charlie Scharf noted. “As a white man, as much as I can try to understand what others are feeling, I know that I cannot really appreciate and understand what people of color experience and the impacts of discriminatory behavior others must live with.”