Conor Hails, head of the University of Pennsylvania's Sigma Chi chapter, was in a Philadelphia hotel ballroom last month for a Barclays Plc recruiting reception. A friend pointed out a banker from their fraternity. Hails, 20, approached with a secret handshake.
"We exchanged a grip, and he said, 'Every Sigma Chi gets a business card,'" Hails recalled. "We're trying to create Sigma Chi on Wall Street, a little fraternity on Wall Street."
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As students vie for 2014 internships in an industry where 22-year-olds can make more than $100,000 a year, interviews with three dozen fraternity members showed a network whose Wall Street alumni guide resumes to the tops of stacks, reveal interview questions with recommended answers, offer applicants secret mottoes and support chapters facing crackdowns.
That's one reason men continue to dominate on Wall Street, where no woman has run a big bank. General Motors Co. announced Dec. 10 it would make Mary Barra the auto industry's first female chief executive officer, the same day research firm Catalyst Inc. showed women holding about one in eight executive roles in U.S. finance.
The fraternity pipeline helps undergraduates beat odds three times steeper than Princeton University's record-low acceptance rate, with Goldman Sachs Group Inc. choosing 350 investment-banking interns this year from 17,000 applicants.
Penn's Alpha Epsilon Pi, which gave up its charter in 2012 to escape sanctions for hazing, got a member into Morgan Stanley for the fourth year in a row. Dartmouth College's Alpha Delta, an inspiration for the 1978 comedy "Animal House," sent someone to the New York-based firm from the fifth consecutive class days after a New Hampshire court reprimanded the chapter for providing alcohol to someone underage, filings show.
Fraternities retain influence in the face of scrutiny by parents, politicians and police for binge drinking, hazing and at least 60 deaths in the U.S. since 2005. A freshman at Baruch College in New York died this month after suffering a blow to the head during a Pi Delta Psi hazing ritual, according to Monroe County, Pennsylvania, District Attorney David Christine.
The largest U.S. banks say they are meritocracies and run diversity programs to shift an industry that once only let women onto the New York Stock Exchange floor as clerks during wartime shortages. Goldman Sachs added 10 women last year to a partnership that had one when CEO Lloyd C. Blankfein was elected to it in 1988.
"There obviously has been much progress since 20 years ago," said Siegfried von Bonin, head of Dartmouth's Alpha Delta chapter. "But the reality is that it's still very much a male- dominated culture."
Fraternity inboxes help show why. One of the recruiting e- mails to Dartmouth's Alpha Delta arrived last month from an alumnus working in a unit of Wells Fargo & Co., the largest U.S. mortgage lender.
The email, a copy of which was obtained by Bloomberg News, was his best chance at reaching the college's top men for next year's analyst class in a San Francisco office that has had Dartmouth grads for eight straight years and Alpha Deltas for four, he wrote. Students could email their resumes to him directly, he added, and they'd go to the top of the pile.
Fraternity members who went to work for Goldman Sachs, Citigroup Inc. and Bank of America Corp. said they were sent back to campus on recruiting trips, where they could tap people from their houses for interviews ahead of other candidates, some more qualified. One said he would sometimes invent endorsements to send to bosses that didn't mention fraternity connections.
Spokesmen for the three banks, Barclays, Morgan Stanley and Wells Fargo declined to comment.
When alumni don't reach out, fraternity members know how to find them. Von Bonin, 21, asked two at one of the world's largest banks for interview advice, he said. They taught him to describe the benefits of the firm's U.S. growth, fast-paced environment and training program.
"They really gave me valuable advice," said von Bonin, who got the internship this year. A job offer came later.
Students and graduates on Wall Street said they didn't see much wrong with a fraternity path to finance. Even applicants with the right handshake need to show drive, dedication and diligence, they said, and many kinds of groups foster bankers, just as houses spawn surgeons and senators.
The network sometimes works so well that it can help accidentally. Jeff Librot, a former head of the University of Delaware's Sigma Alpha Epsilon chapter, wasn't looking to use its connections when he applied for a Bank of Montreal equities internship, he said. A banker there sent him an email with the frat's secret motto, "Phi Alpha." Librot was picked.
That national fraternity has sent almost 3,000 men into finance, according to resumes on LinkedIn, which shows no other industry employing more than 1,800. One of its most successful members, 59-year-old billionaire hedge-fund manager Paul Tudor Jones, apologized in May after telling University of Virginia students that motherhood keeps women from being focused traders.
Research by Lauren Rivera, an associate professor at Northwestern University's Kellogg School of Management, has shown bankers preferring fraternity heads or other potential drinking buddies to candidates with better grades.
"People like people who are like themselves," said Rivera, who interviewed 120 professionals involved in hiring graduates for banking, law and consulting jobs.
College women don't always grasp that men their age are assembling connections that can matter more than schoolwork, said Erica O'Malley, who heads a diversity program at Grant Thornton LLP. She quizzed her children's friends as they passed through her home near Chicago over the Thanksgiving break.
"My daughter will be like, 'Mom, stop,'" said O'Malley, who also heads an audit practice at the accounting firm. "They don't really understand it."
Her company issued a report in March showing the U.S. with the eighth-lowest proportion of female business leaders out of 44 countries. Some of the students who could help boost that ranking find themselves struggling to land work after college.
"I wish I did have more networks," said Emily Hendrix, who plans to graduate in May after three years at Rollins College in Winter Park, Florida. "It would maybe make finding a job a little easier, a little less stressful."
A resume that includes the honor council, cross-country team and Kappa Kappa Gamma sorority along with internships for the CME Group Inc., owner of the world's largest futures exchange, and Bank of America's Merrill Lynch unit seems robust enough to land one. Without job offers for next year, or strong leads from friends, she's been compiling potential options into a spreadsheet listing 123 companies she'd like to work for.
Even as women make up the majority of the industry's support staff, filling 24,000 of 32,000 administrative positions at Citigroup according to its diversity report last year, they hold few of its top spots. Just two are on the firm's operating committee with 22 men. The 11 Goldman Sachs executive officers and top dozen at Morgan Stanley include one woman each.
Evolution comes slowly, according to Jeff Urwin, head of investment banking at JPMorgan Chase & Co. The firm's Winning Women program has led to about 13 additional hires each year since 2004.
"You tend to think of an institution in a structured way, but it's actually a big organic entity," Urwin said. "Driving any kind of change that gets at the culture in an organism is hard because it tends to return to the original form, if you don't maintain that consistent pressure to drive that change."
JPMorgan employs 140 Sigma Phi Epsilon members, according to an article on job preparation in the fraternity's magazine this year. It shows only Bank of America and Wells Fargo employing more.
Fraternities have become so good at filling Wall Street's openings that firms can hire several alumni for each woman. There are at least four members among 14 associates at San Francisco-based private-equity firm Hellman & Friedman LLC, according to resumes posted to LinkedIn. Two of the 14 are female. Fraternity brothers outnumber women four to one in the analyst program at Peter J. Solomon Co., a New York investment bank founded by the former Lehman Brothers Holdings Inc. vice chairman. Spokeswomen for both companies declined to comment.
When those men and women make it to the top, Wall Street's bosses have a secret society all their own with parties in Manhattan's St. Regis Hotel. Kappa Beta Phi, founded before 1929's stock-market crash, throws an annual bash where bankers and billionaires in tuxedos are entertained by neophytes who sometimes don ladies dresses and pumps. Officers called Grand Swipe, Grand Smudge and Grand Loaf lead revelers who've included former Goldman Sachs head Sidney J. Weinberg, American International Group Inc. CEO Robert Benmosche and Mary Schapiro, who ran the Securities and Exchange Commission until last year.
The fraternity pipeline works in reverse, too, when those titans return to campus bearing gifts as large as billionaire Steven Cohen's $2 million pledge to Penn's Zeta Beta Tau. His SAC Capital Advisors LP pleaded guilty last month to insider- trading charges.
Donors rebelled when Trinity College in Hartford, Connecticut, made fraternities go coed after a drunk student broke his neck in a shallow Psi Upsilon pool, Bloomberg News reported in May. With a private-equity veteran, real estate investor and stock analyst among grads condemning the school's efforts, Trinity President James Jones decided to resign a year earlier than planned.
Patrick Laterza, who works in wealth management for Citigroup, went to Binghamton University last year to try to preserve Zeta Beta Tau's chapter there, emails obtained through public-records requests show. It lost recognition from the fraternity's national organization and from the school, a State University of New York campus. A pledge complained he had been waterboarded, the emails show.
"The situation with the chapter that was there was from my understanding a financial one," said Laterza, who manages $130 million according to his LinkedIn page. "We found out later that there were more issues which were then discussed, and in the end the fraternity was dissolved."
The most valuable thing fraternities do to prepare their own for Wall Street isn't controversial or secretive, according to some of the men who went from one to the other.
"It's going to help you assimilate," said Theta Chi alum Christopher Albrecht, who joined Deutsche Bank AG after graduating from Lehigh University in 2007. Colleagues "want to hire people and bring up people you can get along with."
Matthew Benson, a senior at Penn, recalled last month how he was led through a mock interview in January by an older Alpha Epsilon Pi member while sitting near cabinets lined with empty whiskey bottles. The fraternity, now known as Apes, moved off campus in 2012 instead of complying with sanctions that followed hazing claims, according to a university official.
The senior timing Benson's answers and telling him to smile more is now an analyst for a multibillion-dollar buyout firm. Benson landed an internship with a merger adviser, then a job offer for next year. He's already doling out advice to younger fraternity members, including one preparing for a venture- capital interview.
"I was helping him craft his story," he said. "The kids are actually very proactive."