March 7, 2016
What we’re reading this week
Hiring in China
Recently Barlcay’s disclosed that they are coming under scrutiny from U.S. athorities regaring it’s hiring practices in Asia. The list of U.S. and European banks that have hired famility members of Asian officials in order to win business as grown to about 10 according to Bloomberg’s Matt Levine. While it is stricly illegal to accept bribes under the U.S. Foreign Corrupt Practices Act the definition has widened to include hiring someone’s familiy members. The practice has been so wide spread it is clear that these corporations did no think giving jobs to government officials family memebers was a bribe. Companies other than banks have been guilty of this too and last week Qualcom agreed to pay $7.5 million to the SEC to settle charges they violated the Foreign Corrupt Practices Act (FCPA) in hiring relatives of Chinese officials. From the SEC order: “the initial interview decision was “No hire” because the son of the telecom company executive was not “a skills match,” didn’t “meet the minimum requirements for moving forward with an offer,” and among those who interviewed him, “there was an agreement that he would be a drain (not even neutral) on teams he would join.” Qualcom did agree to hire the young man after they were urged to do a “special favor” even though it would be a “pain.” Hey, I work at a firm that hires clients’ kids as interns. But we don’t do it as a “special favor” to clients. The kids we hire are qualified and if they were a “drain” on the team they be gone so fast their heads would spin. How can a firm not see this as a “bribe”?
I thought we had reach litigation saturation when McDonalds was sued for making it’s hot coffee TOO HOT. I was wrong. A class action lawsuit against Subway won final endorsement last month as Subway must now institute measures to ensure that footlong sandwiches and six-inch sandwiches are in-fact 23 and 6 inches long. Despite objections that the suit was silly and proof that the length of bread did not affect the total amount of food customers received the courts agreed to move forward and award $520,000 to the plaintiff’s attoneys as well as $500 to each of the 10 names plaintiffs. Oh boy.
Gangs Turn to High Finance
The Wall Street Journal reported that street gangs are increasingly turning from “drugs and violent crime” to financial fraud. These crimes include everything from the very basic (check fraud) to the more sophisticated (re-encoded credit cards). The rational being that financial crimes pose fewer risks (like being murdered) and are more lucrative. From my experience, legal financial services jobs are even more safe and lucrative than illegal ones so I think the natural progression is that eventually these gangs turn into hedge fund managers and private equity groups. Just think, one day you could invest with the Outlaw Gangsta Crips Financial Advisors!
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