[ by Melanie Gretchen ] "We have witnessed the most educated, successful, and monied professionals in the country put their companies — not to mention their own liberty — at risk by engaging in flagrant and foolhardy illegal conduct." These words were written by Preet Bharara, the United States Attorney for the Southern District of New York, looking back on a speech to the New York City Bar Association about the future of white collar crime enforcement.  Speaking on the future of white collar crime enforcement with regard to insider trading, Mr. Bharara said the emerging problem is not just that insider trading is rampant– it's that it's everywhere.

"What might be most astonishing (and disappointing) is that some of the most egregious securities frauds have occurred at institutions with seemingly robust compliance programs — at least on paper. They have occurred not at fly-by-night outfits but at prominent and powerful companies. And they have been enabled and perpetrated by the highest-flying money managers on Wall Street." -- Mr. Bharara.

Minimalism at Its Worst. What the U.S. District Attorney saw was the 'minimalist' approach companies have assumed regarding compliance.  "Ethical standards have been lowered to doing only what is required to avoid an enforcement action or a criminal charge, rather than focused affirmatively on doing the right thing, staying comfortably clear of the line, and earning a robust reputation for integrity and honesty." To address the issue, Mr. Bharara has taken to speak to business groups, hedge fund associations, compliance officers, securities lawyers, and assemblies of directors at Fortune 500 companies.  In addition, he has appeared before industry and business school audiences, where he met questions equivalent to, "How much can one get away with before it's too late?" Lori Richards, former OCIE Director, saw a similar landscape when she spoke on the culture of compliance in 2003 [see Who's News story, "Money and Greed: Stranglehold on Financial Services"].  Ms. Richards concluded that compliance should be formalized, as "the culture of compliance is too important to be left to subjective impressions." Mr. Bharara built on Ms. Richards' speech to say that companies should assume the responsibility to creating a culture of integrity.  Change must start at the top.  "The burden falls to business leaders and good corporate citizens, who every day can do far more to perpetuate good company and industry culture than any prosecutor ever can. Long before the Justice Department commences an investigation or issues a subpoena, board members, managing directors, compliance officers, and counsel will have had countless opportunities to guard against corruption and calamity. And they must, because by the time federal prosecutors show up at your doorstep, it is often too late." For the full piece, go to [CNBC, 7/23/12].