Wall Street’s biggest banks have for years hired the children of senior Chinese government officials in the hopes that they can open doors and secure deals, David Barboza reports in The New York Times. The hirings, while not well publicized, were no secret. But they are gaining new attention after a Securities and Exchange Commission investigation has raised the question of whether such practices crossed a line at JPMorgan Chase.
The focus of the investigation “has prompted a scramble among the Hong Kong rivals of the New York bank to assess the potential risks of their own hirings,” Mr. Barboza writes. Bankers and lawyers said in interviews that the practice of hiring the children of government officials was so widespread that banks competed to hire the most politically connected recent college graduates. JPMorgan, for its part, has not been accused of wrongdoing and has said it is cooperating with the inquiry.
“For international banks, if you don’t have any of them, it’s difficult for you to get into the circle,” said Jeffrey Sun, a lawyer at Orrick, Herrington & Sutcliffe who is based in Shanghai. “You need intelligence. You need access to information. And this is one way to get that. Even though it’s an ‘inconvenient fact’ for most Chinese like me, that’s real life.”