Mind the Gap | JPMorgan’s ‘Sons and Daughters’ fine won’t stop Wall Street’s unethical hiring practices
Hiring well connected Chinese princelings to win lucrative deals has never been a revelation in Hong Kong. But when JPMorgan agreed to pay a US$264 million fine to resolve criminal and civil matters relating to its “Sons and Daughters” recruitment programme, its sheer size warrants a second look. The cost of doing business in China just went up.
The US Security and Exchange Commission’s 26 page summary of JPMorgan’s Sons and Daughters programme, which started in 2006, reads like a satire of Game of Thrones – infused with nepotism and medieval like privilege. The Department of Justice assessed that the scheme increased profits at JPMorgan by at least US$35 million.
“The so-called Sons and Daughters Programme was nothing more than bribery by another name,” said assistant attorney-general Leslie Caldwell. “Awarding prestigious employment opportunities to unqualified individuals in order to influence government officials is corruption, plain and simple.”
She added that, “Most of those offered jobs through the programme lacked the education and experience of other new hires.” The bank admitted that some of these candidates did little more than proof read although they were paid the same salary as entry-level analysts.
Besides the evident absence of hiring compliance at JPMorgan it is a shame that the fine will probably be absorbed by JPMorgan’s shareholders rather than clawed back from their bankers’ bonuses.
