JPMorgan to pay $264 million to end probe into its hiring practices in China
JPMorgan Chase & Co. agreed to pay about $264 million to settle U.S. allegations that it hired children…
JPMorgan Chase & Co. agreed to pay about $264 million to settle U.S. allegations that it hired children of Chinese decision makers to win business in violation of anti-bribery laws.
The agreement, announced on Thursday, ended a nearly three-year investigation that set off a debate on Wall Street over whether U.S. business standards should be applied in foreign countries and whether favors to influential officials amounted to criminal activity.
The bank will pay about $130 million to the Securities and Exchange Commission, $72 million to the Justice Department and $62 million to the Federal Reserve.
Neither JPMorgan nor individual employees are being prosecuted. Such leniency reflects the bank’s willingness to quickly turn over records and change global policies to eliminate questionable hiring practices at the start of the inquiry, U.S. officials said. The Justice Department’s fraud section started a pilot program this year meant to reduce fines and sanctions in exchange for full cooperation, and the SEC says it reduces penalties or forgoes punishment altogether for companies that cooperate.
The Office of the Comptroller of the Currency is also investigating JPMorgan’s hiring practices in China, people familiar with the situation have said.
The JPMorgan settlement was constructed as a kind of “roadmap” for other companies willing to self-report and provide full cooperation into foreign corruption investigations, the people have said.
The Justice Department is still investigating at least five other unidentified Wall Street banks to see if they’d hired relatives of influential Chinese officials or executives of state-run enterprises to help obtain business or as a reward for steering business their way, two of the people said. They also looked at whether that hiring ran afoul of 1977 Foreign Corrupt Practices Act, which makes it a crime to pay or give other benefits to a foreign government official.
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