Investment Banking Recruiting allows underclassmen to get exploited and doesn't do anything about it.

You're a bright-eyed college freshman, and you already know what you want to do with your life. You want that prestigious job at an investment bank, with your sights set on only the top groups of the most elite EBs and BBs. Luckily enough for you, you're ahead of the curve, already joining your school's top clubs and practicing your technicals. There's only one thing separating you from that dream job: experience. So you run to your nearest job board and start applying to all the internships remotely related to finance. You wait some time and the interviews start rolling in you get one at Red Rock Advisors, a boutique investment bank. One at Ocean Capital Management, a private equity firm! 

You end up crushing every interview, and each interviewer reassures you about how much they value their interns. They told you you'd get to be on deal teams, they'll teach you modeling, and more! You don't even have an offer yet but you're already excited about the experience you're going to get. Maybe you'll even be able to get an even more prestigious Megafund internship and go straight to the buy side. 

You finally get the offer and reaffirm your commitment to work there. They say they can't pay you but why does it matter? The experience is much more valuable! You start next week, and it feels like all your dreams will come true. 

On your first day, they give you some simple work to do, emails, and writing. It's not fun but they tell you that you'll get more hands-on work later. After three weeks, they have you email-blasting founders begging them to sell. After six weeks, you realize that you won't ever get any meaningful work and don't even ask. At least they gave you access to their company drive and you can see the LBO they created over six months ago. As the semester comes to a close, you decide to quit and look elsewhere. You write down on your resume that you sourced 5 deal opportunities and built 17 models. You didn't actually learn anything about Private Equity but it's another line on the resume.

This is the reality for 90% of underclassmen internships. They're unpaid, don't teach you anything, and prey upon students who are desperate to break into banking. I've looked through some of these companies on LinkedIn and they can have over 50 interns at a time. And with the high competitiveness of a high finance job, many students don't think they have a choice but to go through these internships. Legitimate opportunities are rare outside of top targets and diversity programs, and even then extremely competitive. Even some legitimate companies have bullshit internships that take advantage of students. 

This has created a big problem in recruitment because it's either brushed off completely or can even lower the value of students with actual experience. I was fortunate enough to have worked a legitimate internship that was paid and where I did actual PE work, but many just assumed I was a sourcing monkey because they don't take semester internships seriously. Despite this, having 4 BS internships where you learned nothing is better than one singular legitimate internship. As long as people take these jobs seriously, students will continue to be exploited.