U.S. probe of JPMorgan hiring spreads to KoreaA U.S. federal investigation into the JPMorgan Chase practice of hiring the offspring of China’s elite is reportedly expanding to other Asian countries, including Korea.
Investigations into the hiring practices in Korea, Singapore and India come after federal authorities began probing the bank’s hiring of the sons and daughters of Chinese officials and businessmen, possibly to help secure lucrative business deals, according to The New York Times on Saturday. The report said JPMorgan had flagged those countries for review.
Scrutiny into the hiring practices of JPMorgan in China began in August when the largest U.S. bank by assets came under fire for possibly violating anti-bribery laws by hiring family members and relatives of government officials.
In late August, the newspaper reported the bank created a “Sons and Daughters” program in 2006, which in some cases enabled it to secure business deals.
The program was created as a means of hiring connected job applicants separately from regular applicants as elites clamored for jobs at the bank, and was a means to avoid nepotism and bribery charges in the United States, according to the report. These well-connected applicants supposedly faced less rigorous interviews and lax requirements. Some were unqualified in terms of academic records or experience, though others met the bank’s standards.
The probe included the hiring of the son of Tang Shuangning, a former banking regulator who is now chairman of the state-run financial conglomerate China Everbright Group, and the daughter of a Chinese railway official. The New York Times said that following the hiring of Tang’s son, Xiaoning, JPMorgan went from virtually no business with China Everbright to being a top Asian client.
The bank’s hiring process in Asia of candidates referred by clients and government officials is being investigated by the U.S. Securities and Exchange Commission and the Justice Department, as well as authorities outside the United States, according to filings with the commission.
JPMorgan reportedly was subpoenaed by the SEC on Friday for documents in relation to its hiring process in Asia. The bank said it was cooperating on the investigation with various authorities in turning over relevant documents.
JPMorgan’s Korea office said nobody was available for comment yesterday. The Korea branch opened in 1994 and has some 200 employees.
BY SARAH KIM [email@example.com]