Probe of JPMorgan China's hiring practices expands to Asia
Bloomberg in New York
A probe of JPMorgan Chase & Co's hiring practices in China has uncovered red flags across Asia, including an internal spreadsheet that linked appointments to specific deals pursued by the bank, people with knowledge of the matter said.
The US Department of Justice has joined the Securities and Exchange Commission in examining whether JPMorgan hired people so that their family members in government and elsewhere would steer business to the firm, possibly violating bribery laws, said one of the people, all of whom asked to not be named.
The bank has opened an internal investigation that has flagged more than 200 hires for review, said two people with knowledge of the examination, results of which JPMorgan is sharing with regulators.
The scrutiny began in Hong Kong and has now expanded to countries across Asia, looking at interns as well as full-time workers, two people said. The employees include influential politicians' family members who worked in JPMorgan's investment bank, as well as relatives of asset-management clients, the people said.
Wall Street firms have long enlisted people whose pedigree and connections can win business, a practice that does not necessarily violate the law.
The SEC will hunt for evidence showing "these weren't real jobs, that they were only there because their father or mother were important public officials", said Dan Hurson, a former US prosecutor and SEC lawyer who runs his own Washington practice. "If the public official requested the job for the child, that would be a strong indication to the company that the official was seeking and receiving something of value."
The government has not accused JPMorgan or its executives of wrongdoing in connection with the hiring inquiry.