JPMorgan Chase to pay $264 mn to settle foreign corruption charges
18 November 2016
JPMorgan Chase & Co. today agreed to pay $264 million to settle US claims that it won business from clients and corruptly influenced government officials in the Asia-Pacific region by hiring children and friends of highly placed Chinese officials in violation of the Foreign Corrupt Practices Act (FCPA).
JPMorgan has agreed to pay $130 million to the US Securities and Exchange Commission (SEC), $72 million to the US Justice Department (DoJ) and $61.9 million to the Federal Reserve Board of Governors.
According to the US regulators, investment bankers at JPMorgan's subsidiary in Asia created a client referral hiring program that bypassed the firm's normal hiring process and rewarded job candidates referred by client executives and influential government officials with well-paying, career-building jobs at JPMorgan.
During a seven-year period, JPMorgan hired approximately 100 interns and full-time employees at the request of foreign government officials, enabling the firm to win or retain business resulting in more than $100 million in revenues.
''JPMorgan engaged in a systematic bribery scheme by hiring children of government officials and other favored referrals who were typically unqualified for the positions on their own merit,'' said Andrew Ceresney, director of the SEC Enforcement Division.
''JPMorgan employees knew the firm was potentially violating the FCPA yet persisted with the improper hiring program because the business rewards and new deals were deemed too lucrative,'' he added.
The DoJ called the scheme "bribery by any other name" and said it threatened national security.
JPMorgan is not the only bank to be investigated. HSBC, Goldman Sachs & Co., Credit Suisse, Deutsche Bank and UBS are under the scanner over their hiring practices in China.
''We do not expect this to be the last action resulting from that sweep,'' Ceresney, told reporters yesterday.