Bank Regulators Join Investigation Into JPMorgan’s China Hiring
(Bloomberg) -- The Federal Reserve and the Office of the Comptroller of Currency have joined investigations into JPMorgan Chase & Co.’s hiring practices in China, according to people familiar with the matter.
The Fed is seeking a fine of as much as $62 million from the bank, and the OCC is also seeking punishments to settle claims that a breakdown in controls resulted in JPMorgan inappropriately hiring the children of Chinese officials to win business, the people said, asking not to be identified because the talks are private. Those probes would come on top of settlements being negotiated with the U.S. Securities and Exchange Commission and federal prosecutors.
At issue is whether the bank’s hiring of relatives of influential Chinese officials was tantamount to paying a bribe that ran afoul of the Foreign Corrupt Practices Act. The 1977 law made it illegal to provide pay or benefits to a foreign government official.
JPMorgan is expected to settle later this year with the U.S. Justice Department and SEC to end the three-year probe. The bank could pay about $200 million to resolve the investigations, people familiar with the matter have said. While the Justice Department’s examination initially focused on JPMorgan, it widened to include other Wall Street firms, according to the people.
Spokesman for the Fed, OCC and JPMorgan declined to comment.
The banking regulators’ investigation was reported earlier by the New York Times.