JPMorgan to pay about $271 million to settle Asia hiring probes

JPMorgan to pay about $271 million to settle Asia hiring probes

JPMorgan Chase and Co is expected to pay about US$200 million (S$271 million) to settle criminal and civil probes over its Asian hiring practices, according to a person familiar with the matter.

A settlement, which could come later this year, would end probes that began three years ago into whether JPMorgan investment banking executives in Hong Kong hired sons and daughters of officials of Chinese companies as a way to win business.

The prospect of a settlement was reported on Thursday by the Wall Street Journal.

JPMorgan would likely admit that its hiring practices violated a US law prohibiting giving something of value in exchange for business, the Journal said.

The settlement could pave the way for similar outcomes of ongoing inquiries into other banks.

While it is not unusual for investment banks to employ children of powerful people, JPMorgan's potential liability increased when investigators found documents indicating executives were tracking the business results of hiring decisions, another person familiar with the matter said earlier.

Here is an excerpt from the Journal's report:


A resolution to the JP Morgan investigation would be the first among the wide-ranging probes into Wall Street banks' hiring of "princelings," the kin of high-ranking Chinese government officials and managers of state-owned companies, allegedly to curry favour in getting deals. The settlement could pave the way for similar outcomes in ongoing inquiries into other banks, people familiar with the cases have said.

The Wall Street Journal has previously reported that JP Morgan hired the children of several powerful Chinese government officials who appeared to be unqualified for their positions and kept some on despite poor job performance. In one email, a bank executive discussed how to "handle the son in NY and leverage the father in China."

One of the hires, Gao Jue, is the son of China's current commerce minister, Gao Hucheng. Gao Jue did poorly on his job interviews at JP Morgan, messed up his work visa, accidentally sent a sexually explicit email to a human-resources employee and was described by a senior banker as "immature, irresponsible and unreliable," according to internal bank emails reviewed by the Journal and people familiar with the matter. JP Morgan's decision to hire Mr. Gao was widely understood within the bank to have been supported by William Daley, a senior executive at the time and former US commerce secretary and White House chief of staff, according to the internal bank emails.

In all, JP Morgan hired 222 candidates under a programme known internally as "Sons and Daughters" that ran from 2004 to 2013. They included those referred by officials at nine of 12 large Chinese companies that the bank took public in Hong Kong.

Read the full article here

OTHER WSJ.COM STORIES:

- Discord between China’s top two leaders spills into the open

- Malaysia’s Najib under renewed pressure in 1MDB case

More about

Purchase this article for republication.

BRANDINSIDER

SPONSORED

Most Read

Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.