Morning Coffee: Elite students with JPMorgan internships seduced by villains offering money and more. Citi seems to be getting more and more co-heads

It is apparently not only private equity firms that carry out “on-cycle” recruiting of junior bankers at ludicrously early points in their career cycle, in the belief that they’ll be getting the cream of the dealmaking talent pool in a few years’ time. Bloomberg has an absolutely crazy story from Paris which suggests that in at least one case, an insider dealing ring started recruiting students on the assumption that they would soon be in a position to pass on tips.

Get Morning Coffee ☕ in your inbox. Sign up here.

The insider dealing ring allegedly approached students at elite French universities and business schools, like HEC Paris, targeting people who were interns and juniors at Rothschild, JPMorgan, Lazard and HSBC.

The grooming process seems to have been quite full-on – one young banker who ended up at Rothschild was introduced to the gang by a friend, and then found that they were offering to pay his rent as he went for internships.  They also gave him advice on how to act and even how to dress, presumably in order to make sure that their investment would pay off with a good job offer.

This banker denies having given the gang anything, and hasn’t been charged with any wrongdoing (he also moved on from Rothschild a while ago).  But even being investigated is an awkward thing to have to explain to your boss.  And although he turned down the kind offer of rent, it seems that he kept in touch with the crooks and went out for dinner with them a few times, leaving a paper trail on encrypted messaging acts.  Presumably today he wishes that he had turned them down flat (as the other young professionals at JPMorgan, Lazard and HSBC apparently did).

Anyone with the intelligence to make it in banking ought to be aware that there’s no such thing as a free lunch.  They should also be aware that people who provide helpful advice are often trying to push an agenda, not least because that’s what investment bankers do. 

And furthermore, they ought to be aware that insider dealing is a surprisingly unprofitable crime, compared to the honest money you can make by advising on M&A deals and collecting the fees.  The syndicate currently being prosecuted in this case seem to have made about $400k out of the information that got leaked to them about a single transaction, which would hardly pay a bonus for a second year associate when split half a dozen ways.

Elsewhere, for a bank that has spent the last year delayering and streamlining its management structure, Citigroup really seems to be hiring quite a lot of co-heads, doesn’t it? The latest announcement is Pankaj Goel, coming from JP Morgan to be global co-head of tech coverage.  But it’s the latest in a series including Aloke Gupte (co-head of ECM) and Alex Watkins (co-head of tech financing) and Drago Rajkovic (co-head of M&A).

What’s behind the trend? Cynics might say that it’s got something to do with the expiry of Vis Raghavan’s non-solicitation agreement, and indeed, a lot of the incoming co-heads do seem to have JP Morgan legacy.  And in some cases, like that of Anthony Diamandakis, the arrival of a new co-head has prompted a previous sole head to consider leaving the bank. 

But in general, every co-head structure tends to be unique – they’re always a compromise, but compromises often have to be made, particularly in a people business.  And the current rash of investment banking co-heads all seem to be in directly revenue generating roles, rather than the kind of middle management positions that Project Bora Bora was tolerating.  Investment banks are like hydras – it’s easy to cut off heads, but much more difficult to stop another two growing back where only one existed before.

Meanwhile …

The “first AI-native bank”? In actual fact, small boutique banks targeted at the smaller and medium sized business sector (where many M&A transactions are driven by the owner’s wish to retire or move on) are not as uncommon as OffDeal suggests, and many of them only have half a dozen employees, who spend their time on client contact rather than modelling.  But it’s unusual to say the least for the Managing Director of such a firm to be a 25-year old, and if AI-enabled search can take the place of a grizzled old veteran’s Rolodex, that’s potentially a big change for the industry … and one that might be replicated at larger scale. (FT Alphaville)

New York bankers are still coming to terms with the horrible events at Blackstone yesterday, and with the fact that disturbed shooters are now targeting executives.  As a result, many firms are now going to consultants for advice on increased security, architectural changes and access control. Millennial bankers who grew up with “active shooter drills” at school may now have them at work too. (FT)

HSBC has now asked its MDs to be in the office four days a week, so it’s Monday or Friday rather than Monday and Friday.  The purpose is to “set the tone from the top”, so other ranks are likely to be encouraged to do the same. (Bloomberg)

Having been through some tough times and redundancies, Irish local heroes Goodbody are hiring again, including some bankers who had previously left the firm. (Irish Times)

The market French rainmakers’ recruitment carousel has speeded up once more – JP Morgan has hired Thierry Sancier, leaving Celine Mechain as the sole head of France, Belgium and Luxembourg for Goldman Sachs. (Bloomberg)

“Vibe coding” is the way of the future at Meta, apparently, which will begin to allow some job candidates to use AI copilots in coding tests given as part of the interview process. (WIRED)

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Signal: sarahbutcher.22  Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. 

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)