Morning Coffee: Jamie Dimon has no sympathy for these 22-year-old bankers. Caroline Ellison on the angst of having an affair with your boss

There’s only one thing worse than being at a presentation where the big boss makes a joke and nobody laughs.  And that’s when everybody laughs, but the boss wasn’t joking.  Apparently wannabe bankers at Georgetown University made this faux pas at a talk given by Jamie Dimon.

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It’s an almost understandable mistake to make – apparently the actual words were “the other thing I don’t like … a lot of you work at JPMorgan, and you take a job from private equity before you even start with us”.  Dimon has quite a folksy manner and good comic timing, but he quickly made it clear that he didn’t intend this in a sort of “oh you rascals” kind of way, more in a “that's unethical. I don't like it, and I may eliminate it regardless of what the private-equity guys say” kind of way.

JPMorgan’s recruiters gave the same message to new joiners in the investment banking team a month ago, in a memo informing them that taking private equity offers “could result in us reconsidering the status of your employment”, but it seems that Jamie Dimon not only wanted to underline the firm’s commitment to stamping out “on-cycle recruitment”, but to give his reasons for doing so.

Perhaps surprisingly, these don’t seem to have much to do with not wanting to provide free training for other companies.  In Dimon’s view, it’s straightforwardly a matter of conflict of interest – “You are already working for somewhere else, and you are dealing with highly confidential information for JPMorgan”.  But he also had a somewhat more interesting point to make, questioning whether it was really in the junior bankers’ interests to play this game in the first place.

He told the Georgetown students that “I think it's wrong to put you in the position …You have to kind of decide the next career move before you have a chance to even decide what the company is like”.  Which is definitely true – private equity recruitment now begins practically as soon as the new analyst class have arrived.  This has been widely criticised by people who think that candidates can’t possibly be assessed properly when they haven’t got any meaningful experience. 

But early recruitment also deprives the junior bankers themselves of an opportunity to have any time to think about whether private equity is actually the job they want to do, or whether they’re just applying to it because somebody told them that it’s the top prize and they’ve been taught all their life to chase for top prizes.

A couple of weeks ago, Jamie Dimon created a new role to oversee the welfare of junior bankers, and threatened that MDs who broke the norms on workload would see the consequences to their bonus.  It must be really quite frustrating for him if some of those juniors repay this kindness by using the spare time created to go away and apply for even higher-pressure jobs somewhere else.  No wonder he’s lost his sense of humour on this issue.

Elsewhere, Caroline Ellison, formerly of crashed crypto firm FTX, has been sentenced to two years in prison for her role in Sam Bankman-Fried’s frauds.  (Sam himself was sentenced a few months ago; he’s currently appealing and apparently has rap star P Diddy as a new dorm mate as Diddy awaits his own trial on unrelated matters).

The sentencing hearing took into consideration a statement from Ellison’s defence team which reads curiously like a university application – she has apparently been fostering rescue dogs, helping low income families with their taxes and writing a historical novel loosely based on her sister’s love life (?).  But the statement also reiterated a major theme of her trial – the extent to which her relationship with Bankman-Fried made everything absolutely unbearable.

Part of the problem seems to have been the very on-off nature of the relationship, which seemed to combine the worst features of having an affair with your boss and working for your ex.  According to Ellison, “when Sam and I are sleeping together, or are in ‘flirty mode,’ I feel better about work and life”, but at other times “what stresses me out about work is specifically failing Sam, or Sam’s disapproval”.  It’s difficult to feel too much sympathy for someone who caused so much trouble for others, but it’s definitely a cautionary tale for anyone who might be considering a similar romantic move even if the work setting isn’t quite so criminal.

Meanwhile …

The litigation story at EF Hutton gets wilder, as former CEO Joseph Rallo has not only denied all the allegations but launched a countersuit against the company and former partner David Boral, claiming that the accusations of falsified expenses and gambling addiction are “baseless” and “motivated by animosity”.  (Bloomberg)

It seems that national stereotypes are still there even among the ultra-wealthy – at a recent family office conference in Lausanne, panel sessions were dominated by geopolitical risk and disaster, but at the equivalent conference in Laguna Beach it was all about sports team ownership. (Institutional Investor)

JPMorgan bankers might want to choose their words carefully when handing out congratulations on the American Banker Most Powerful Women in Banking list, as Marianne Lake has been ranked 2, while her potential competitor for the CEO succession, Jennifer Piepszak was one place lower. (American Banker)

Sergio Ermotti has told employees of UBS in Asia that their business is still central to the bank’s strategy, but that the growth is going to be “less linear” than the USA.  This echoes the note of cautious optimism from Iqbal Khan’s town hall a few weeks ago. (Bloomberg)

Does this reflect worries over Paris, issues relating to the EU bonus cap, or just personal preference of the founder?  Palinuro Capital, a new global macro hedge fund, is going to be based out of Amsterdam. (Reuters)

An Indian smart-mattress company has decided to strike back at banking work practices by launching a “sleep internship”.  Saishwari Patil, an investment banker working in Bengaluru, has won the equivalent of $10,000 for having the best sleep habits this year. (The Hindu)

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