Morning Coffee: Bank sued for fake-interviewing diversity candidates for high paying jobs. Jamie Dimon wants his bankers back on the road

Is there anything in banking more degrading than a fake job interview?  Everyone knows that interviews are an ordeal – they’re stressful for the candidates, a tedious task for HR professionals and a distraction from real work for the senior bankers called in to give a “business perspective”.

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Because the process is such a chore, there’s an implicit contract between everyone involved that it should only be done in good faith.  If, as the plaintiffs allege in a lawsuit against Wells Fargo that got the go-ahead today, a bank regularly calls people in for interviews for jobs paying over $100k, simply in order to meet internal diversity targets for interviewing, but has no intention of hiring them because it's already awarded the job to someone else, then that’s pretty bad. 

Wells Fargo is defending the litigation, which has been brought on behalf of shareholders who lost money when the New York Times covered the original whistleblower story.

Unfortunately, this kind of thing is pretty ubiquitous.  Recruitment is difficult and time-consuming, and banking is a business in which personal relationships and trust are really important.  Because of this, lots of bankers prefer to use their personal networks and contacts to build their teams.  So a lot of the time, when a senior banker has a vacancy, he or she also has a strong idea of the exact person that would fit it.  In a lot of cases, the person comes first and the job second – lots of bankers move into posts that were created specifically for them.

This is a pretty good way of acquiring talent.  However, it’s not transparent at all.  Large employers can reasonably be concerned about the building up of crony networks.  In extreme cases, like the “princelings” scandal of the 2010s, the handing out of good banking jobs can cross the border into bribery.  And even in the very best case, most bankers’ networks tend to lack diversity.  If your hiring policy is based on the principle of PLULPLU (people like us like people like us), then you’re likely to end up with a very “pale, male and stale” workforce.

Because of this, large banks’ HR departments tend to dig their heels in, at least some of the time, and insist that there’s at least some sort of process you have to go through before you can spend $100,000 of the firm’s money. It’s not unnatural to include diversity targets in that process, as Wells Fargo apparently did.

But some bankers always prefer to try to find a clever way around the rules, rather than just stand up and demand that HR makes an exception in their case, which is how you get to a situation where wasting people’s time becomes standard operating procedure. 

Separately, Jamie Dimon has always made it clear that when he told JPMorgan bankers that it was time to return to the office, he really meant that he wanted them to go to their clients’ offices, as well as their own. (This apparently caused a few problems at the end of the pandemic, as many hedge funds and LBO shops were considerably less risk tolerant). 

Jamie has now given another interview emphasizing the importance of meeting people face to face, and going wherever they may be found – the Hamptons, Davos, even the Olympic Games.  Obviously there’s a temptation to mutter “OK Boomer”, and to chalk it up to the distaste of a famously gregarious older banker for more modern methods of interaction like Zoom calls.  But Dimon might have a point – as he suggests, if you want to find out what customers really think, you have to meet them in their own space.

And so Jamie travels, not just to schmooze and sell, but to find out what’s happening out in the real world.  He even apparently sent his consumer banking team to China so they could experience at first hand how fintech “super-apps” worked there.  JPMorgan bankers should cut out and keep his words of wisdom for the next time someone questions their travel expenses.

Meanwhile …

Having abolished titles in order to “remove hierarchical barriers” in 2021, DWS is now reintroducing them, in order to make it clear who is actually in charge of what. (Financial News)

Cindy Lui was fired from Citigroup in 2019 after a regulatory scandal in Hong Kong relating to the practice of claiming the existence of fictitious “natural” buyers for stock trades.  She says she never misrepresented anything and is now suing the bank. (Bloomberg)

There are plenty of rainmakers in Abu Dhabi now that the big banks are setting up offices there, but there are also rainmakers in Abu Dhabi.  Local climate scientists in the UAE claim that they’ve mastered the art of “cloud seeding” and can basically make it rain on demand. (WIRED)

Arki Busson, once famous in London for his fund of hedge funds business, his educational charity and his string of famous girlfriends, is now trying to recreate the Golden Age of Hollywood in a new movie studio in New Jersey.  Surely a cameo in “Industry” awaits? (WSJ)

After cutting staff earlier in the year, the New York office of Rothschild is still shaking loose senior bankers - Reza Vahabzadeh has joined the consumer team at Nomura as a Managing Director (Bloomberg)

The dreaded “cold shoulder” is the worst punishment you can get for misbehaviour in a British takeover – it basically means that nobody in London will work with you. Only eight people had previously been sanctioned this way, but another ten got the treatment yesterday. (FT)

For a while it was a sore point for Goldman Sachs bankers that Morgan Stanley had a larger market capitalisation than they did – now the natural order of things has been restored. (Bloomberg)

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