Update | JPMorgan settles bribery case for US$264 million after probe into Chinese hires
The US investment bank ran a programme known internally as ‘Sons & Daughters’ that hired 100 children and relatives of influential Chinese officials and businesspeople over a seven-year period
The settlement ends a three-year investigation into whether the hiring practice at the New York-based bank had breached US anti-bribery laws. At issue was whether JPMorgan was systematically targeting to hire the relatives of China’s most influential officials, policymakers and business leaders to curry favour with the country’s decision makers.
JPMorgan will pay the SEC US$130 million. It is also expected to pay US$72 million to the Justice Department and US$61.9 million to the Federal Reserve Board of Governors, according to the SEC statement.
“JPMorgan engaged in a systematic bribery scheme by hiring children of government officials and other favoured referrals who were typically unqualified for the positions on their own merit,” Andrew Ceresney, director of the SEC Enforcement Division said in the statement. “JPMorgan employees knew the firm was potentially violating the Foreign Corrupt Practices Act (FCPA), yet persisted with the improper hiring programme because the business rewards and new deals were deemed too lucrative.”
The regulator said JPMorgan’s Asia unit created a hiring programme that allowed clients and influential government officials to recommend potential job candidates. Those referred under the programme bypassed the firm’s normal hiring practises and received “well-paying, career-building JPMorgan employment,” the SEC said.