Why Did a Bank Just Rescind Your Job Offer, and What Can You Do About It?
It’s four days before you start your new full-time gig, and you just received a short email from HR:
“After further consideration, we have decided not to proceed with an offer of employment at Goldman Stanley, LLC. We regret any inconvenience this may have caused you.”
Yes, that’s right: your offer was just rescinded.
You planned your entire life around this job, signed a year-long apartment lease, and told everyone about it.
And now it’s gone.
So what happened, and what can you do about it?
Why Banks Rescind Offers
A bank might rescind your internship or job offer for one of four reasons:
- You did something stupid.
- You did something silly.
- You have legal troubles that may never go away.
- Circumstances at the firm have changed massively, or something else outside of your control happened.
Let’s go through each reason and look at a few examples:
You Did Something Stupid
Your offer could be rescinded if you outright lied on your resume, sent in a fake transcript, listed a false GPA, or made up something that’s easy to disprove with a bit of research.
A long time ago, banks were not especially stringent with background checks: as long as you passed the drug test and didn’t have any crimes on your record, you were good to go.
They also verified the employment dates for past jobs/internships, but that was about it.
But banks, especially large banks, have become significantly stricter over the years.
They are now going well beyond rudimentary checks and are also verifying what you did in each internship/job.
In the past year alone, I’ve heard multiple stories of offers getting rescinded because someone exaggerated too much on their resume (e.g., pretending back-office experience was client-facing work).
If you’re unsure whether you’re spinning too much, ask us first.
Negotiating too much or making absurd requests also falls into this category.
For example, some people win internship or job offers and then ask to “defer” them for a year.
But banks are not universities.
They spend a lot of time and money recruiting you – sometimes around $5,000 per entry-level candidate – and they may not have the same hiring needs the next year.
So you accept the offer and start when they want you to start, or you lose the offer.
You Did Something Silly
A long time ago, I interviewed with a boutique bank as a “Plan C” option.
I was also interviewing with bigger banks, hedge funds, and prop trading firms at the same time.
I won an offer from the boutique bank but then proved “unresponsive” to their follow-up emails and calls.
For example, I took more than 24 hours to respond to emails, sometimes I let messages go to voicemail, and I didn’t call everyone back.
They correctly interpreted this behavior as me not being interested in the firm… and a week later, they rescinded my offer.
Banks, just like outside recruiters, focus on the highest-probability hires.
An MD’s time might be worth between $350 and $1,000 per hour, so he/she cannot afford to take time away from deals and chase a student who is uninterested in the firm.
The firm decided to cut its losses by rescinding my offer and focusing on more interested candidates.
I put this one in the “silly” category because no one should ever interview with so many different types of companies at the same time.
Other Examples of Silliness
I’ve also seen offers get rescinded when candidates try to negotiate too much, especially at smaller firms that appear to be open to negotiations.
For example, you push for a 5% salary increase and a month off before you start, but they give you only two weeks.
They agree to the salary increase, but not the month off, so you ask again – and they rescind the offer.
That won’t happen everywhere, but if the firm is very conservative, don’t push your luck.
Exaggerating your accomplishments can also fall into this category.
Sometimes, bankers at different firms who worked on the same deal say they accomplished the same things… when interviewing at the same PE firm.
Interviewers might call you on this if they notice it during the interview, but they might not realize until much later on.
If you went too far or “copied” someone else’s experience, they could rescind your offer.
You Have Legal Troubles That May Never Go Away
Banks can rescind your job offer for almost any reason, including:
- Prior misdemeanors, even if they’ve been expunged or happened when you were a minor.
- Poor credit, prior bankruptcies, or too much debt in collections.
- Underage drinking, drinking + driving, drug use, or any other combination of those.
These issues can result in a rescinded job offer even if you disclose everything, and the bank says you’re “OK” at first.
Nope, life is not fair.
These legal issues are much bigger risks at the bulge-bracket banks because of their regulation and compliance requirements.
In the interview I linked to above, the student overcame a rescinded offer at a big bank by going to smaller CRE (commercial real estate) firms instead.
Circumstances Have Changed
Finally, your offer could be rescinded for reasons that have nothing to do with you.
- The firm’s deal flow slows to a trickle, and they no longer need interns or new hires.
- The firm is collapsing or is financially distressed. Bear Stearns rescinded job offers when it was acquired by JPM in 2008 as the financial crisis began.
- The manager who hired you has been reassigned or forced out in a restructuring.
- There was a simple misunderstanding or mistake in the paperwork or hiring process.
The good news is that you have the most options in this case; the bad news is that you still need to find another internship or job.
What to Do When Your Offer Gets Rescinded
Let’s start with what not to do: do NOT sue anyone or take legal action, even if your parents are wealthy, or you have a trust fund and can afford expensive lawyers.
Taking legal action or threatening to do so is a terrible idea because:
- You’ll never be able to work in the finance industry again;
- Even if you win, you’ll recover very little money; and
- Most employment contracts with banks are “at will,” meaning you can be dismissed for any reason and without warning.
With that disclaimer out of the way, you need to figure out why your offer was rescinded first:
- Did you lie about something?
- Do you have a criminal record?
- Did you do something to indicate that you weren’t super-interested in the firm?
- Have you heard about financial problems at the company?
Categories #1 and #2: You Did Something Stupid/Silly
You cannot do much in these scenarios, other than apply for new internships/jobs and avoid the mistakes you made the first time around.
A bank will not reverse its decision or help you with the job search if your offer was rescinded because of your actions, so don’t even bother asking them.
Category #3: Legal Troubles
If you’ve had legal issues, but you never disclosed them on background check forms and you never mentioned them to HR after receiving your offer, you can’t do much.
You shouldn’t disclose these issues too early – i.e. in a first-round interview – but you also need to let the bank know at some point, usually right after you get the offer.
If you never did this, the bank will question your judgment and conclude that you might not be fit for the job.
If you did disclose these issues, HR said they were fine, but then someone suddenly changed their mind, you have more options.
You should go to the most-senior banker who interviewed you, explain what happened, and ask if he/she can provide referrals to other banks or groups that might be looking for people.
You could say or write the following:
I hope all is well. I am contacting you because I just received the unfortunate news that my offer at the firm has been rescinded due to the legal issues I previously disclosed, namely [Describe].
When I first mentioned these items, [Name] from HR indicated there would not be any problems. However, something changed over the past [X weeks/months], and now the firm views them as unacceptable.
Do you know of any other banks looking to hire for [Position Name] roles? No worries if you do not, but I would really appreciate any referrals or tips you could provide.
If these issues sank your chances at a large bank, you should focus on boutiques, middle-market firms, and smaller buy-side funds that lack the resources for comprehensive background checks.
Category #4: The Deus Ex Machina
If you can’t find anything suspicious about the company in the news, you have no legal issues, and you were honest about everything, your rescinded offer might be in Category #4: the deus ex machina.
If you get a mysterious “job rescinded” email or letter, you should go to the highest-level person (the Group Head or MD) and find out what happened.
Send this person a note requesting a written explanation for why your offer was rescinded:
I hope this email finds you well. I’m writing because I recently received news that my offer at [Firm Name] in the [Group Name] group was rescinded, and I am a bit confused because I was given no reason for this sudden decision.
Can you please let me know why the firm made the decision to rescind my offer? I would appreciate knowing so that I could plan out my next steps.
If they do not respond, or they provide a vague explanation like “The firm changed directions” or “It was due to internal restructuring,” call and see if you can get the real story.
And if it was something that had nothing to do with you, use a template similar to the one in Category #3 above and see if you can get referrals or interviews elsewhere.
On the off chance that someone made a mistake and that your offer has not been rescinded, you’ll be glad you followed up to check first.
Rescinded Offers 101
In short, banks rescind offers because you are replaceable.
Senior bankers have key relationships that make them difficult to replace, but you don’t have such protection as a junior person.
Sure, it’s always hard to find good people, but your skill set isn’t unique.
Banks are also incredibly risk-averse with hiring, so they would prefer someone who is “pretty good,” with no major flaws, to someone who is exceptional in some areas but problematic in others.
This logic is why a bank could rescind your offer for almost any reason, ranging from silly mistakes to legal troubles from 10 years ago to internal politics.
If it was your fault, you can’t do much aside from fixing your mistakes and re-applying to other firms.
If you lost your offer because of legal troubles, you might have some options depending on how much you disclosed.
And if you lost the offer for reasons outside your control, you might be able to get referrals and interviews at other places if you impressed the right people during recruiting.
If you’ve had a job or internship offer rescinded, leave a comment below and describe your story, and we can give you some hints on what to do next.
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