It’s easy to make blanket statements about hiring on Wall Street. In large part, the people that make it to high level positions in finance have all come from the same cities, the same schools, and yes, often the same families.
So it isn’t surprising to see so many people in and around the industry pooh-poohing the investigation into JPMorgan’s hiring practices in China revealed this weekend. The bank is being probed for two specific deals that regulators suspect were given to JPM in exchange for the hiring of two “princelings” — the offspring of China’s ruling party.
The news prompted just about everyone, including the New York Times’ Andrew Ross Sorkin, to ask — “When is a new hire on Wall Street scrutinized over possible bribery?”
After asking the question Sorkin goes into a long list of stellar, upstanding Wall Streeters and their connections. It’s been happening for years, he argues, it’s a grey area. Most of these people are qualified and talented anyway.
And Sorkin is right. It is a grey area. That’s why the government is probing two specific deals. Two specific relationships. When the area is this grey, we can’t make blanket statements, it’s time to think critically about hires on a case by case basis — that’s what this investigation is about.
Where do you draw the line, you ask? There’s a difference between hiring someone because you know their name carries weight in certain circles, and (in the alleged case of one JPM China hire) because your hire carries with it a $US5 billion IPO deal in short order.
That’s the line, at least according to the Foreign Corrupt Practices Act. It doesn’t matter if the hire in question can do the job either — making a hire in order to do a deal is forbidden.
There’s no denying that this is a grey area on Wall Street, but just because it is, doesn’t mean we don’t investigate specific cases where it seems the grey may have slipped into black.
So let’s just wait and see how this all shakes out before we dismiss it as simply more of the same.
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