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Reporter of China Business Network: Wang Haimin Editor of China Business Network: He Xiaotao, Zhao Yun

On July 26, a video titled "A Day in the Life of a 985 Freshman at an Investment Bank" went viral online. The video showed that the college student studied at CITIC Construction Investment during the summer vacation, drove a Porsche to work, and played golf and badminton after get off work. The most controversial part was that the video leaked information about project clients of multiple CITIC Construction Investment's investment banking departments.

On the evening of July 27, CITIC Securities issued a statement saying that recently, a video shot by Wang Moumou, a student of a certain university, during his study at CITIC Securities attracted social attention. The company attached great importance to it and immediately set up a working group to conduct an investigation.

After verification, the student is a freshman at Huazhong University of Science and Technology, and his father is a non-public official who has never worked in a financial regulatory department. After investigation, it was found that the student was introduced to the company's research department by a team leader of the company's investment bank in violation of regulations. The company has dismissed the leader and will hold the head of the investment bank department accountable.

Regarding the company's customer information involved in the video, the company will try its best to reduce the impact on customers and effectively safeguard the rights and interests of customers. The information involved in employee work notes and other information is a routine due diligence record. After investigation, it was found that there was no assistance in financial fraud. The company will accept supervision and inspection by regulatory authorities at any time to ensure that business operations are in compliance with the law.

The company will conduct in-depth summaries, serious reflections, and solid rectifications on the problems and omissions in internal management, and draw inferences from them to further improve the company's management system, internal control, and personnel management.

What exactly is "research and study"?

It is worth noting that a relatively unfamiliar word appeared in this incident - "research and study". How is it different from internship in the traditional sense?

The reporter asked several securities firms, investment banks and relevant department personnel, and the feedback he got was that they had never heard of the term "research and study" before.

The student is a freshman, which does not meet the requirements of a general intern. "We have never heard of 'research study'. Here we only have internships, and generally students who are in their third year or above or in their first year of graduate school come to intern," a relevant person in charge of a securities company told reporters.

In addition, a senior insurance agent from a leading securities firm told reporters that generally speaking, investment banking interns have certain professional requirements, usually in finance, law, accounting and other majors.

The relevant person in charge told the reporter, "It is impossible for us to let a student who is not majoring in finance or law to intern in our investment banking department. Our investment banking requirements are still relatively high."

"Internships that require internship certificates have certain requirements for the major. If so-called research and study do not require certificates, then it doesn't matter what the professional background is." A person with many years of investment banking experience pointed out to the reporter, "Sometimes the head of an investment banking team needs to expand the team so that clients can see that they are impressive, especially if there are some handsome young people. This is a plus for getting projects. There should be no compliance issues."

The industry strengthens the management of compliance requirements for interns

In the video shot by the student that circulated online, information of three customers appeared, including the "Hairo Innovation Project", the "Wangyuan Technology Project" and the "Guoneng Information Control Project". Among them, Wangyuan Technology withdrew its IPO application in March this year.

The video shows that the student also visited the Guoneng Information Control project site. However, Guoneng Information Control and HaiRou Innovation have not yet disclosed IPO application information.

Sources from several securities firms told reporters that signing confidentiality agreements with interns is a routine operation. "We have signed internship agreements with each intern, which contain confidentiality clauses," said a person in charge of the above securities firms.

The video was widely circulated on the Internet, and it caused a huge stir in the industry, attracting widespread attention from practitioners. "Our company forwarded this news to all departments and privately told them to keep an eye on the interns," a securities firm practitioner told reporters.

The insider of the above-mentioned securities firm admitted, "I saw that the mainstream media has also started reporting on it, and the topic has become a hot search on Weibo. This incident has quickly fermented, and some friends around me believe that the impact on the reputation of the (securities) industry may be no less than the 'CICC Little Red Book' incident."

Since the "CICC Xiaohongshu" incident in July 2022, the securities industry has strengthened the management of formal employees' social accounts. In recent years, there have been some interns introduced through non-standard channels in the securities industry (the so-called "black workers"), and the management loopholes and public opinion risks of such interns are more difficult to control.

It is understood that after the above incident caused a public opinion storm, some securities firms further strengthened the management requirements for interns. According to media reports, many securities firms have taken action. An investment banker from a securities firm said that after the student’s video went viral, his department required strict management of the scope of interns’ access to confidential information and documents.

"In fact, we strengthened the management of interns across the company at the end of last year, which included the confidentiality and safety education for interns mentioned by our peers. We emphasized it again yesterday afternoon," the above-mentioned brokerage insider told reporters.

Reporter|Wang Haimin

Editor|He Xiaotao Zhao Yun Du Bo

Proofreading|Zhao Qing

Cover image source: Video screenshot

｜Original article from nbdnews, Daily Economic News｜

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Daily Economic News