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On Defensive, JPMorgan Hired China’s Elite
- brudgers 13y agoThe phrase "too big for jail' comes to mind.
- wavefunction 13y agoThe phrase "just right for a hangman's noose" comes to mine.
- spamizbad 13y agoTo play devil's advocate... If a vast majority of your hires are still done on merit, you can afford a few hundred "connection" hires. I know it doesn't align with the "meritocracy" mantra capitalist institutions like to boast about but even the most committed capitalist must admit it's in JP Morgan's financial best interest to staff some "princelings" to ensure they're competitive for deals. And, as long as you don't put these hires in charge of anything important, these new hires can't do you any harm. BTW this sort of thing isn't unheard of in the US either -- children of high-ranking politicians get sweet gigs at financial institutions in the US as well. Chelsea Clinton only recently left her Wallstreet gig: http://www.businessweek.com/news/2012-10-03/chelsea-clinton-exited-wall-street-to-seek-career-with-meaning http://www.businessweek.com/news/2012-10-03/chelsea-clinton-... And during the 90's Dotcom boom, Startups would sometimes hire family members from some of their VCs, hoping to ensure additional rounds of funding. This is just business as usual.
- peteretep 13y agoIt's bribery, and if any UK banks are caught up in it, they face literally unlimited financial penalties and criminal charges against the directors, wherever it happened in the world. The article seemed to suggest US regulators were taking an interest too.
- rayiner 13y agoYes. Hiring kids of connected people is hardly unheard of in American investment banking. What makes the Chinese situation murkier is the fact that many of these deals are sourced from state-owned enterprises, and the kids being hired are the children of politicians who may have direct influence or oversight over these corporations.
- foobarqux 13y agoIt's going to be difficult to prove that the hiring is directly connected to some benefit. Often that type of nepotism is done to increase the chance of securing unspecified future business.
- mathattack 13y agoThe issue isn't a matter of meritocracy. It's a question of is this bribery or not. It's also most certainly not limited to China. Do top US schools favor the kids of politicians and execs who might be able to impact their funding? Do US companies hire very well connected kids to sell private wealth or banking services?
- theklub 13y ago"Its not what you know, its who you know"
- bonemachine 13y agoThat plainly is not what the SEC investigation is about. The article makes this very clear. You might want to give it a closer read.
- spamizbad 13y agoYes and yes.
- bonemachine 13y agoIt's a question of is this bribery or not. And if so, whether anyone will be held accountable for it.
- minimax 13y agoChelsea Clinton's Wall Street gig was at a hedge fund, not an investment bank.
- bonemachine 13y agoThis is just business as usual. No, it's not. It's about attempting to influence a foreign government into doing business with you via corrupt practices. Which makes it subject to regulation by Congress. Which in the SEC's view, JPM may have been in violation of. Please read the article again. It's really quite clear about this.
- alimoeeny 13y agoWith hindsight, it should have been obvious that this will happen, when countries/economies with corruption (relative) gain momentum, everybody else (including US) wants to play along, not to lose business, and corruption begets corruption.
- alimoeeny 13y agoread the title and thought it is a cyber-security article,
- calbear81 13y agoI don't really see what's wrong since they're exploiting the way the Chinese do business. There isn't an implied bribe here, but JPMorgan knows clearly that Chinese officials (many of whom are corrupt) will steer business to their children's firms. Put another way, JPMorgan just hacked hiring.
- bonemachine 13y agoI don't really see what's wrong since they're exploiting the way the Chinese do business. What's "wrong" is that it appears they may have been in violation of federal anti-bribery statutes. In particular this thing known as the Foreign Corrupt Practices Act. The original article was pretty clear about this point, so it's hard to see how you don't "see" it.
- Beliavsky 13y agoMuch of our ruling class graduated from selective universities with legacy preferences and "development" cases. Making a stink about nepotism in China is hypocritical.
- auctiontheory 13y agoThis is so ridiculous. From the fire station to Harvard to Goldman, hiring and admissions in the US are overwhelmingly influenced (i.e. it "makes a difference") by who you know. What are we trying to prove with this witch hunt in China? That we are such a pure and law-abiding democracy? After Snowden, you'd be a fool to believe any of that. This kind of thing really hurts American companies doing business overseas, while accomplishing nothing useful.
- bonemachine 13y agoWhat are we trying to prove with this witch hunt in China? It isn't a "witch hunt." There's reason to believe it's a violation of federal anti-bribery laws, in the SEC's view. That we are such a pure and law-abiding democracy? You're changing the subject. This kind of thing really hurts American companies doing business overseas, while accomplishing nothing useful. If by "this thing" you're referring to the bribery practice itself, rather than the investigation of it, then I definitely agree.
- auctiontheory 13y agoYou are completely (deliberately?) missing my point. If bribery is the way business is done in China (and many places around the world), then the anti-bribery regulations serve only to hamstring US businesses. From everyone I've spoken to who works in these countries, there is no way to do big business in China, Russia, India, without bribery. Not allowed to bribe? You hire a contractor (i.e. not an "employee") to do your bribery for you. Just creates more bureaucracy for US companies relative to their European competitors. And if the point of the anti-bribery regulations is to, I don't know, have a more ethical and law-abiding US, then the US Government should start with itself. These regulations (see above paragraph) do not reduce bribery overseas or help to make a better world.
- bonemachine 13y agoIf bribery is the way business is done in China, .. then the anti-bribery regulations serve only to hamstring US businesses. No, they do not "serve only to hamstring US business." They exist to prevent private parties from undermining ("with corrupt intent") foreign policy as dictated by the executive branch, and by congress. They may (or may not) "hamstring" overseas business practice, as a side effect. But it is only through very muddled thinking that you can take the view that is the "only", or the most significant effect of anti-bribery statutes.
- awt 13y agoThe problem for JP Morgan is that they're in this position in the first place. If they have so little value to offer as a company that they must rely on nepotism then they are ultimately doomed one way or another.
- auctiontheory 13y agoWrong-o. At that level (or any level) of business, it's all about the relationship. You buy from the person you know and trust. That's true in the US, and even more so in China.
- awt 13y agoTrue but boring. And not a defense against a company with a truly innovative product. If you have something people really want you should have to make fewer compromises.