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SEC opens bribery investigation into JPMorgan’s Chinese operations

The investigation reportedly concerns hiring officials’ children in exchange for contracts

Just one week after two employees were charged in the “London Whale” bank records scandal, JPMorgan Chase & Co. has run afoul of the U.S. government once again. This time, however, the company’s issues come from another continent.

The Securities and Exchange Commission has opened a bribery investigation into JPMorgan’s Chinese operations. Reportedly, the investigation centers on allegations the bank hired the children of high-ranking Chinese government officials to secure important contracts.

According to The New York Times, a JPMorgan filing from earlier this month says U.S. investigators are looking into “business relationships with certain clients.” In one instance, JPMorgan reportedly hired a former banking regulator’s son who later became chairman of the China Everbright Group, a state-controlled financial conglomerate. After this hire, the company then received multiple coveted assignments from the Chinese government.

In another example, JPMorgan’s Hong Kong office hired a Chinese railway official’s daughter. This official was later accused of exchanging government contracts for cash bribes, according to public documents. Around the same time, the state-owned China Railway Group selected JPMorgan to advise its plans to become a public company. With the bank’s help, China Railway raised more than $5 billion when it went public in 2007.

A spokesman for JPMorgan says the company is “fully cooperating with regulators.”

 

For more of JPMorgan’s troubles, check out these InsideCounsel articles:

U.S. said to plan charges against ex-JPMorgan employees in bank records scandal

JPMorgan to pay $410 million in record energy settlement

California sues JPMorgan over debt collection practices

JPMorgan must face lawsuit over Lehman investments

JPMorgan, Credit Suisse settle mortgage bond charges for $417 million

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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