Banks' hiring of well-connected relatives in China widespread

|By:, SA News Editor

While the SEC is only now investigating JPMorgan (JPM) for possibly hiring the children of influential officials in China to win business, the recruitment by major banks of well-connected relatives has been going on for over a decade.

Goldman Sachs (GS) once employed the grandson of former Chinese President Jiang Zemin and Credit Suisse (CS) the daughter of ex-Prime Minister Wen Jiabao. In 2006, the son-in-law of of a politburo member helped Merrill Lynch (BAC) win a deal to work on the $22B IPO of state-owned bank ICBC.

While some of the recruits work hard, others barely make it to the office. Still, regulators might find it difficult to prove a direct connection between an appointment and the obtaining of a contract.