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SEC widens probe into hiring practices at banks

  • Goldman Sachs (GS), Deutsche Bank (DB) and Credit Suisse (CS) have reportedly joined JPMorgan (JPM) on the list of banks being investigated for their hiring practices in China. Morgan Stanley and Citigroup are also being scrutinized.
  • The SEC is looking at whether the banks breached laws relating to foreign bribery by recruiting the family members of the well-connected in order to win business.
  • The probe into JPMorgan has uncovered an email from a senior JPMorgan executive in Hong Kong saying that the bank's recruitment program for family members of senior government and other officials - called Sons and Daughters - had an almost "linear relationship with winning assignments to advise Chinese companies." A spreadsheet tracks JPM's record for converting hires into business deals.
  • However, documents that JPMorgan has handed over as part of the investigation don't indicate that executives at the bank's New York HQ knew of the recruitment strategy.
Comments (24)
  • Storm Warning
    , contributor
    Comments (155) | Send Message
     
    ["However, documents that JPMorgan has handed over as part of the investigation don't indicate that executives at the bank's New York HQ knew of the recruitment strategy."]

     

    Simply another example of a bank Too Big Too Manage - break it up.
    8 Dec 2013, 07:17 AM Reply Like
  • maiapeleg
    , contributor
    Comments (6) | Send Message
     
    Good
    8 Dec 2013, 10:17 AM Reply Like
  • lewhite
    , contributor
    Comments (150) | Send Message
     
    Is this how the SEC spends its time? And they let the Madoffs of the world slip through the system for years.
    8 Dec 2013, 07:20 AM Reply Like
  • minecanary
    , contributor
    Comments (400) | Send Message
     
    The deals JPM won w/China due to this were probably worth more then the Madoff scheme. Plus they were busy fixing Libor, smacking gold, selling bad mortgages, stiffing MF Global customers, and cornering derivative markets. Oh yeah, and they were in on the Madoff thing too. It sounds like the SEC needs a special division just to keep up w/the crooks at JPM. Oops, nobody is actually at fault...
    8 Dec 2013, 12:30 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    MINECANARY

     

    THE SEC is still watching videos so a special division is out. The democrats don't want Corzine jailed so mf global customers are out of luck. What industry do you work in and we can get some horror tales for you. In history a lot of people did and are doing bad things.
    I never hear anyone going after the credit agencies on the various securities. Maybe you should ask why the present administration
    let the statue of limitations exonerate many of the criminal's is that because many financed the democrats in the 2008 election?
    8 Dec 2013, 04:13 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2444) | Send Message
     
    Actually, there was an attempt to prosecute the credit agencies. You can google the details if you're interested. Courts threw out the case because in the courts' view, allowing prosecution would violated these companies' First Amendment (free speech) rights.
    8 Dec 2013, 04:35 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    sd n s

     

    thanks I missed that. I' assumed their defense was they render opinions and like a "certified" used car or certified anything its only as good as your trust the certifier. On the other side I always wondered why the buyers of the mortgage crap were never sued or in some cases indicted for breaking their fiduciary duties.
    8 Dec 2013, 04:47 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2444) | Send Message
     
    Yes, that's right. The free-speech argument was of course introduced pretrial by one of the credit agencies (I believe it was S&P). The courts found it persuasive. The cases were never heard.

     

    As for suing...there's been plenty. One of my better performing holdings is AGO, an MBS and muni insurer. I entered that position right after they won their first (civil) suit against the big banks -- was against BofA (misrepresentation => contract violation). Once AGO had precedent, they went after the other big banks and won. Over and over. Share price is finally starting to reflect their success but it was a rough ride.
    8 Dec 2013, 05:17 PM Reply Like
  • maiapeleg
    , contributor
    Comments (6) | Send Message
     
    Great
    8 Dec 2013, 10:17 AM Reply Like
  • deercreekvols
    , contributor
    Comments (5052) | Send Message
     
    Jamie Dimon is the present-day Sergeant Schultz...."I know nothing!"

     

    http://bit.ly/J420DI
    8 Dec 2013, 03:29 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    DEERCREKVOLS

     

    Great video reminds of my public high school buddies, who said any time a teacher was unprepared they sent them to watch movies. In later years it made sense why public education was going down hill.
    9 Dec 2013, 09:35 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2444) | Send Message
     
    Interesting East-meets-West ethics/legal collision. Bribery in various guises seems to be a sanctioned and accepted way of doing business in many parts of the world. Even in the U.S., corporations can "donate" to members of Congress to "help pay off campaign debts". I wonder if all nations allow bribery in some form and the difference is only in the form bribery takes to be culturally acceptable and/or legal....
    8 Dec 2013, 03:38 PM Reply Like
  • lewhite
    , contributor
    Comments (150) | Send Message
     
    Well put SanDiego.
    8 Dec 2013, 03:58 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (10894) | Send Message
     
    Cronyism in the big banks is not just in Asia. Although they mask favored hiring of connections to Ivy League schools there clear connections between hiring friends, relatives, and well connected people in the US as well.
    8 Dec 2013, 05:02 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    MOON

     

    I see we have Indosuez in common.
    9 Dec 2013, 10:18 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    MOON

     

    it easier for everyone to blame what's done outside the country, than
    admit the many firm's hire for the piece if paper. I have met great MBA and then again I met some you need to give a map so they find their way to the subway after two weeks of employment.
    8 Dec 2013, 05:08 PM Reply Like
  • pigeonguy
    , contributor
    Comments (99) | Send Message
     
    Most organizations are guilty of hiring someone you know or who knows someone in the organization from time to time. If you want to go after the most flagrant in this practice you need go no further than the government itself. The Federal Government is worse than anyone. The ambassadorships are noted for political patronage (think paybacks for past or future favors). Look how ex-members of Congress get hired as lobbyists. Now if you have proof that was someone was hired to gain influence and that person was not given legitimate work assignments or never reported to work, you may have a case.
    8 Dec 2013, 05:46 PM Reply Like
  • sarichter
    , contributor
    Comments (258) | Send Message
     
    Bribery would be the only illegal part of this article. Hiring people that have ties with potential clients... that's just an economic advantage.
    8 Dec 2013, 05:50 PM Reply Like
  • june1234
    , contributor
    Comments (2330) | Send Message
     
    When I grow up I want to be a banker . Multi billion $$ fines, 24/7 probes across the globe and stock keeps going up, bout 20% last yr alone. Cant beat that job description
    9 Dec 2013, 08:25 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    JUNE1234
    UP SIDE
    THE AVERAGE INTERNATIONAL BANK OFFICER MAKES 125K
    8% MONEY PURCHASE, AND 10% 401K MATCH
    3 BUSINESS TRIPS A YEAR AND 4 WEEKS VACATION.
    DOWN SIDE
    AVERAGE WORK WEEK 65 HOURS
    9 Dec 2013, 09:29 AM Reply Like
  • minecanary
    , contributor
    Comments (400) | Send Message
     
    It seems that hiring relatives is just another flavor of what drives the whole world...it's what you are born with in one way or another. Almost all wealth is 'earned' via the thanks Dad method. More money is made in Hollywood or on the news set by how you fill out an outfit then by your overwhelming intelligence...
    10 Dec 2013, 11:26 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    MINE CANARY
    The thanks dad method works well in Hollywood and on farms
    Not so well in businesses, family businesses based on 3 generations or more have been in decline. Those in upper management and new small businesses are the best for new money. My high school class of 65 all from the middle class has been hunting for classmates for our 50th anniversary.
    Of the 160 alumni we have found an astounding 120 are multi millionaires of a class of 250. It would be nice if every class had that many, it does prove that hard work does pay off.

     

    10 Dec 2013, 11:55 AM Reply Like
  • minecanary
    , contributor
    Comments (400) | Send Message
     
    If the figures are accurate, it sounds like the middle-class neighborhood, wasn't :)
    11 Dec 2013, 10:15 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (1519) | Send Message
     
    MINECANARY

     

    You took my reference wrong, we were all from the middle class but from all over NYC not one neighborhood. We use to joke that most of the parents were either civil servants or worked for the NY telephone company.
    11 Dec 2013, 11:40 AM Reply Like
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