JPMorgan 'sons and daughters' probe extends to Asia-Pacific
A US federal investigation into the hiring practices of JPMorgan Chase has expanded beyond the borders of China, where the bank faces questions about whether it hired the children of powerful Chinese officials to win lucrative business there.
The bank disclosed in a securities filing on Friday that authorities were looking into "its business relationships with certain related clients in the Asia-Pacific region and its engagement of consult-ants in the Asia Pacific region".
JPMorgan did not specify where the inquiries were directed. But according to people briefed on the matter, government authorities are examining JPMorgan's hiring practices throughout Asia, focusing on South Korea, Singapore and India. That scrutiny comes after JPMorgan itself flagged those countries for further review, the people said.
The investigations from the US Securities and Exchange Commission and the Justice Department, the people noted, were still in their fledgling stages. Hong Kong and British authorities are also investigating the bank's hiring practices, said the people, who spoke on the condition of anonymity.
It is unclear whether authorities suspect improper activity in these regions beyond China or are simply placing a marker for a possible broader investigation. Either way, the global focus signals a fresh challenge for the bank and an escalation of the inquiry.
The focus of the case surfaced in August, when it emerged that federal authorities - led by the SEC's anti-bribery unit - had begun an investigation into the bank's hiring of the sons and daughters of China's elite. They included the daughter of a Chinese railway official and the son of Tang Shuangning, a former Chinese banking regulator who is now the chairman of state-controlled financial conglomerate China Everbright Group, according to a confidential government document.
At one point, according to interviews with the anonymous sources, the bank created a formal "Sons and Daughters" program. And in some cases JPMorgan won business from companies with ties to the children.
JPMorgan said on Friday that the bank was "co-operating with these investigations".
JPMorgan has not been accused of wrongdoing.