As previously reported, the bank giant was accused in a lawsuit of conducting interviews with “diverse” candidates without the intention of hiring for the role. Former executive Joe Bruno addressed this concern, saying the “fake interviews” were “inappropriate, morally wrong, ethically wrong,” according to the New York Times.
I presume the rationale is that when these claims became public the stock price was adversely impacted meaning public investors during that period lost money. Not all shareholders are wealthy people playing the dips and highs for maximum gains or have any connection to the bank itself. For example some everyday people may have had their modest retirement funds or life savings impacted as some of these investments commonly include bank stocks as they are seen as “safe” and are usually not direct investment decisions that these people make if part of a managed portfolio.
This is the risk that comes with holding stock directly or indirectly, but for some this not really a “benefit” but an attempt to get back their hard earned money that they tucked away and then lost through no fault of their own. Governments have historically bailed out banks when they are in trouble regardless if caused by the banks actions or not, so I see no reason why a bank should not have to cover people’s losses caused by their corrupt actions through a class action lawsuit.
The article wasn’t specific about how the settlement amount was decided upon, but it’s a class action lawsuit, so the more class members there are, the less each one receives. The people who were actually doing these bogus interviews are, therefore, getting less than they would have as a result of the shareholders getting ‘bailed out’.
Maybe that was factored into the amount and they’re getting the same amount they would have, but if not, it’s bullshit and IMO should all be going to the people who went to the interviews.
I couldn’t also see the definition of “qualified” candidate in the article. Someone may have attended one of these fake recruitment processes but secured employment elsewhere in the same timeframe without any real financial penalty other than having their time wasted. Also just holding stock during that time does not mean an actual loss was realised by a shareholder. A bit of a mess for either type of candidate to work out compensation.