As the US Securities and Exchange Commission deepened its investigation into the hiring of two Chinese bankers by JPMorgan Chase & Co, the tradition of "client hires" has now come under serious scrutiny. A common practice in the banking industry, the hiring practice refers to clients passing on the resumes of relatives or friends to bankers. The latter, meanwhile, would then ensure that these resumes get to the hands of the staff in charge of hiring interns for that year when they visit the heads of the companies they cover.
A Hong Kong based investment banker told Reuters, "It happens all the time where a coverage guy will toss over some client kid's CV. Finance is about doing favors for people. It's what makes the world go round."
These client hires still have to go through the tests and interviews like all other applicants. The recruiters and bankers who talked to Reuters, however, revealed that between two candidates with similar qualifications, the one with the most influential connections would most likely get the internship.
Banks would violate the provisions of the US Foreign Corrupt Practices Act if they hire someone related to or recommended by a foreign official in the hope that the favor would be returned by granting the bank a specific business.
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