A federal investigation into the hiring practices of JPMorgan Chase has expanded beyond the borders of China, where the bank faces questions about whether it hired the children of powerful Chinese officials to win lucrative business there.
The bank disclosed in a securities filing on Friday that authorities were now looking into â€œits business relationships with certain related clients in the Asia Pacific region and its engagement of consultants in the Asia Pacific region.â€ JPMorgan did not specify where the inquiries were directed.
But according to people briefed on the matter, government authorities are examining JPMorganâ€™s hiring practices throughout Asia, focusing on South Korea, Singapore and India. That scrutiny comes after JPMorgan itself flagged those countries for further review, the people said.
The investigations hinge on the Foreign Corrupt Practices Act, a 1977 federal law that effectively bars United States companies from giving â€œanything of valueâ€ to foreign officials to obtain â€œan improper advantageâ€ in retaining business. In recent years, the S.E.C. and the Justice Department have increased their enforcement of the law, which is violated if a company acts with â€œcorruptâ€ intent, or with the expectation of offering a job in exchange for government business.
So far that link is unclear in the JPMorgan case. Yet, according to interviews, along with a review of securities filings and news reports, JPMorgan employees in Asia pinpointed the advantages of hiring the officialsâ€™ children. In an internal document, the interviews show, the employees linked the hires to the â€œrevenueâ€ that JPMorgan obtained from companies run by those same officials. (Source: nytimes.com)