Lie Detector Tests for Investment Banking Jobs?

Thinking about polishing the wording on your investment banking job resume? Now, you may have more cause for being careful about stepping over the line and fudging your background.

A former FBI agent who spent her career grilling career criminals and mobsters is now hawking her services in the hunt for the next Bernie Madoff or similar scamster, on behalf of large institutional investors.

Elizabeth Prial has spent her career honing her lie-detection skills. She’s now working for big investors who want to know for sure if prospective fund managers are telling the truth about their funds and returns. Other affluent investors are reportedly turning to behavioral specialists as well, to check for deception, according to a story in the Wall Street Journal.

While there’s no universally-accepted clue that reveals a lie, behavioralists look for certain “microexpressions” which hint that people are concealing something. These microexpressions include pupils changing size, which corresponds to fear; irregular breathing, which can flag nervousness; split-second facial expressions (“tells” in poker) that can hint at emotion; motionlessness, which is often caused when people are suddenly focused on telling a lie; or an extremely quick verbal response, which indicates a prepared answer.

Using behavioral screening techniques on prospective employees isn’t new, either. Sigmund Warburg, founder of the giant London-based investment bank S. G. Warburg & Co., used psychological tests, including handwriting analysis of potential staff, to try to uncover character flaws.

But even lie detection professionals say that their work isn’t fool-proof. Some people just can’t be “read” accurately. In fact, ex-FBI agent Prial says people on Wall Street may be better liars that most people. That’s because they have behaviors that point to narcissism (an inflated sense of self-worth), a trait that is apparently linked to deception.

Have you ever endured psychological testing as part of an interview for an investment banking job? What’s the weirdest test you’ve been asked to do? Add your comments below.

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