The UK's Institutional Investor Council has issued a blistering report on the excessive fees that investment banks charge companies to issue new shares -- fees which one issuer are "usually immoral". It certainly seems that way, looking at this chart: fees have been steadily increasing over time, even as the discount at which the new shares are issued has got larger and larger. The bigger the discount, of course, the less risk taken on by the underwriter, since the more that the share price would have to plunge overnight in order for the underwriter to risk losing money on the deal.
Yes, this chart includes the financial crisis, and it stands to reason that fees for rights issues would rise during a crisis. But we're not in a crisis any more, and the fees aren't coming down to their historical levels, even though the discounts are still enormous. And it's notable that fees hit these highs on a percentage basis just as the amount of underwriting was surging:
What we're seeing here is a textbook example of banks squeezing every last dollar they can out of their clients just when those clients are most desperate for money. And it stands in stark contrast to legal fees, which were considered fair by issuers and which have not risen visibly at all over the past few years.
None of this is illegal, of course, but it's fair to call it unethical, if ethics are fundamentally based on the principle of "treat others as you would like to be treated".
Christina Rexrode had a long article on banking and ethics in Sunday's Charlotte Observer, and she concentrated on the kind of behavior which steps close to or even over the line into outright illegality. Maybe it's just so blindingly obvious that banks behave in a fundamentally immoral manner most of the time that her editors considered that not to be news -- charging $35 for a $2 cup of coffee, slapping enormous overdraft fees onto those who can least afford them, pushing high-interest credit cards on desperate customers, locating credit-card operations in South Dakota where usury laws are at their laxest, encouraging people to use the bonkers anachronism that is signature debit, steering customers into the financial products which pay the highest commissions, etc etc. All of this is legal, and all of it is designed to funnel as much money as possible from the customers' pocket to the bank's bottom line, and none of it is in the customer's best interest, which means that none of it can really be considered moral.