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JPMorgan Chase investigated over China princeling hiring


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JPMorgan Chase investigated over China princeling hiring

More legal problems for JPMorgan Chase, which is now the focus of a bribery investigation.

The US government’s Securities and Exchange Commission is looking at whether the bank’s Hong Kong office hired sons and daughters of powerful heads of state-owned companies in China.

It is alleged that was done to get underwriting business and other contracts.

News of the China hiring probe comes just days after criminal charges were brought over the ‘London Whale’ trading scandal that cost it close to five billion euros.

In that case, two former JPMorgan traders have been accused of deliberately understating losses on trades on the bank’s books.

These are the latest in a series of legal and regulatory headaches for Chief Executive Jamie Dimon.

Dimon piloted the bank through the financial crisis, but it is now facing at least a dozen investigations from federal agencies and state and foreign governments.

US law does not stop companies from hiring politically well-connected executives. But hiring people in order to win business from relatives can be bribery, and the SEC is investigating JPMorgan’s actions under the US Foreign Corrupt Practices Act.

SEC spokeswoman Florence Harmon declined to comment on the investigation. A Hong Kong-based spokeswoman for the bank declined to comment beyond what was in the bank’s regulatory filings and said the bank was cooperating with probes.

Earlier this month, the bank revealed that it was facing parallel criminal and civil probes by the US Department of Justice in California into mortgage bonds that it sold before the financial crisis.

And last month, the bank agreed to pay a $285 million (213.4 million euros) penalty and give back $125 million (93.6 million euros) of trading profits in a settlement with the Federal Energy Regulatory Commission for alleged power market manipulation. JPMorgan neither admitted nor denied violations.

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