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JP Morgan is being investigated by the SEC for nepotism in China

By Funke Oyelade,

JP Morgan, a U.S. lender, is being investigated by the Security Exchange Commission (SEC), for violating anti-bribery laws in its hiring practices in China.

The U.S. lender is no stranger to investigations or scrutiny for its practices in one way or another. we previously reported that JP Morgan was one of the nine banks sued by Fannie Mae.

In 2006, JP Morgan began a program called Sons and Daughters, which was supposed to protect against hiring due to favors, but obviously it did not work.

On Nov. 13, New York Times reported that there appeared to be some shady dealings in its Hong Kong location when it came to hiring.

In August, the New York Times reported that the SEC anti-bribery unit requested e-mails from JP Morgan about Tang Xiaoning. He is the son of Tang Shuangning, who is chairman of the China Everbright Group.

The Wall Street Journal reported that the SEC is trying to see if JP Morgan deliberately hired the offspring and relatives of Chinese elites in order to secure business.

The e-mails released to the SEC shows a correlation between the hiring of Chinese elite’s offsprings and relatives and securing business, according to the New York Times, which has been the first to break the story since the beginning.

If found guilty, JP Morgan could face legal trouble since such practices violates the U.S. Foreign Corrupt Practices Act of 1977, which prohibits U.S. businesses from bribing foreign businesses in order to get business or an unfair advantage.

Goldman Sachs, Chase & Co., Deutsche Bank AG, Citigroup, Morgan Stanley, and Zurich-based Credit Suisse Group AG are also being investigated for its hiring practices in China as well.

Photo courtesy of Wikimedia Commons.

 
 

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