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The latest must-read banker chat room debacle

Chat room

Typically speaking, if a chat room conversation between bankers goes viral, it’s terrible news for the firm. The latest, taking place amongst HSBC bankers, paints a more opaque view of the bank. It involves a bold and seemingly immoral ask, followed by some outrage and a little by-the-book tattling.

The chat room talk, leaked to the New York Post, stars senior banker Robert Domanko, head of HSBC’s institutional equity derivatives business. Domanko reportedly asked traders within the firm to sweeten a swaps offer to a client, while still keeping it slightly below a rival’s bid, because the bank had what he perceived to be a bit of leverage: HSBC got the client’s son an internship.

First, Domanko asked the traders to improve the price of the deal by a few basis points, without offering a reason. When asked, he openly divulged. “To look competitive …maybe he gives it to us if we are close but not the best price…jenn spent 2months helping the clients son get an internship,” he wrote in December 2013, according to the Post. “Chance he gives to us if close, but not best offer.”

This, if it wasn’t obvious, is the shame-inducing part of the story. However, HSBC can at least feel good about the response from the other traders in the chat room. “Amazing,” one wrote. “Are you kidding me on that helping the clients son get an internship?” wrote another. The bankers then sent the transcript to HSBC’s human resources department.

The deal never happened and no laws were broken, but for a bank that’s been battling an image problem, avoiding headlines is a clear goal. A spokesperson for the bank didn’t comment to the Post on what if any discipline Domanko faced.

Perhaps the weirdest part of the story is that one of the traders said that the son of the client didn’t even intern at HSBC. Banks’ efforts to limit the use of chat rooms can’t come fast enough.

Hiring Roundup (eFinancialCareers)

In the latest hiring roundup, the SEC needs mathematicians, Wells Fargo is adding bodies in Europe and what was once SAC Capital is hiring cops.

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Nearly 90% of sell-side analysts who made the jump to the buy-side after the completion of their program were men. Females are statistically more likely to remain at investment banks after their first two years.

Son Kills Hedge Fund Boss (NY Post)

Thomas Gilbert Sr., 70, founder and chief investment officer of New York’s Wainscott Capital Partners, was fatally shot by his son, Thomas Gilbert Jr., on Sunday. The younger Gilbert was arrested later that day.

Morgan Stanley Employee Steals, Posts Customer Data (The Guardian)

Morgan Stanley has fired an employee who stole the account numbers of 350,000 clients and posted 900 on a website with the likely hope of enticing a buyer. The data received “virtually no hits” and the account numbers have been changed. Next up for the now ex-employee: the FBI.

Junk Bond Hiring (Bloomberg)

Deutsche Bank and other firms are hiring junk bond traders, in part to refill seats that have been vacated by senior traders.

London Making a Comeback (Bloomberg)

While New York remains the unofficial financial capital of the world, London appears to be making a run for the title. Job vacancies at London’s financial services companies increased 18% in 2014.

JPM Breakup? (Bloomberg)

Being a banking analyst who works for a bank must be strange. Goldman Sachs analyst Richard Ramsden just came out with a paper that suggests J.P. Morgan would be more valuable to investors if it broke itself apart.

Buzz Around the Office

Hypocrisy? (NY Times)

Most Harvard faculty championed the Obama administration’s Affordable Care Act. Now, years later, the vast majority voted against changes made to their own healthcare plan that are a direct result of the Act.

Quote of the Day: “I made no resolutions for the New Year. The habit of making plans, of criticizing, sanctioning and molding my life, is too much of a daily event for me.” – Anais Nin

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