how does an ethical wall work 
the policy of building an ethical wall within a company is common in investment banking through their client relationships investment bankers frequently have access to non public material information concerning publicly traded companies or companies that are about to become public through an initial public offering ipo investment bankers are responsible for developing information barriers that control the flow of confidential information from one department of the bank to another and to other business units within the bank the need for an ethical wall in the financial industry became more critical after the enactment of the gramm leach bliley act of 1999 glba the law repealed federal regulations prohibiting companies from providing any combination of banking investing and insurance services the glba reversed restrictions on such combinations that had been in place since the great depression the glba also enabled the creation of today s financial giants such as citigroup and jpmorgan chase the glba has been criticized for several reasons particularly for its impact on consumers and its contribution to economic crises like the one experienced in 2008 2009 it weakened consumer protections by allowing the consolidation of financial services potentially limiting consumer choice and bargaining power the glba s facilitation of large financial conglomerates increased systemic risk by concentrating financial activities making institutions too big to fail and exacerbating economic downturns ethical walls increasingly came into the spotlight during the dotcom bubble when the gramm leach bliley act of 1999 prevented banks insurance and financial firms from merging in order to protect customers information 1