It’s who you know, you know! SEC starts investigating HSBC over suspected nepotism when hiring in Asia
An investigation by the US Securities and Exchange Commission (SEC) has begun, in which the US regulatory authority is probing the practices by which HSBC Holdings plc (LON:HSBA) conducts its recruitment process in the Asia Pacific region, a location in which the financial institution’s roots lie, and in which it is one of the largest global […]
An investigation by the US Securities and Exchange Commission (SEC) has begun, in which the US regulatory authority is probing the practices by which HSBC Holdings plc (LON:HSBA) conducts its recruitment process in the Asia Pacific region, a location in which the financial institution’s roots lie, and in which it is one of the largest global banks.
The SEC investigation cites nepotism with regard to hiring staff within its operations in Asia, a practice which also spurred an investigation into JPMorgan’s recruitment procedure in Asia, whereby the bank was accused of hiring ‘princelings’, which is terminology that refers to the preferential treatment given to children or younger close relatives of senior executives and government officials in China.
HSBC is one of the world’s largest interbank FX dealers, having risen to the top during 2015, with its market share for corporate clients being the highest in the world for the first time, putting an end to Citi’s 39 year uninterrupted reign.
Corporate performance has been a serious matter for consideration in the boardroom at HSBC this year, however, with revenues down to a level that has caused the bank to reinstate a pay freeze in which no senior management will receive increases in remuneration for the duration of 2016.
A brief upturn in fortunes during the third quarter of the financial year in which HSBC’s profits increased by a healthy 32%, prompting the institution to shelve its plans to uproot its operations from London’s Canary Wharf and move them to Hong Kong came to an end this morning however, when the firm’s annual report showed figures that were worse than expected for the entirety of 2015, causing shares to drop in price by 3.6% in early morning trading today.
The bank today issued a public statement on the matter, stating:
“HSBC has received various requests for information and is cooperating with the SEC’s investigation.”
As this is the early stage of the investigation, the bank has been unable to gauge the potential effect of an outcome, however it has stated that the possible impact “could be significant.”
Photograph: HSBC Head office in Canary Wharf, London E14, taken from West India Dock Road.