Morgan's hiring practices in India, Singapore under scrutiny
Nov 02 2013 , New York
A report in the New York Time said that the federal investigation into the hiring practices of JPMorgan Chase appears to be expanding beyond China into other Asian markets.
In a filing with Securities and Exchange Commission, the bank disclosed that the federal regulator and the Justice Department were now looking into "its business relationships with certain related clients in the Asia Pacific region and its engagement of consultants in the Asia Pacific region."
While JPMorgan did not specify the countries where the inquiries were directed, the NYT report cited people briefed on the matter as saying that government authorities are examining JPMorgan's hiring practices throughout Asia, focusing on South Korea, Singapore and India.
The scrutiny comes after JPMorgan itself flagged those countries for further review, the people said.
The investigations into the Asian markets are still in "fledgling stages", the report said, adding that Hong Kong and British authorities are also investigating the bank’s hiring practices.
JPMorgan said it is "cooperating with these investigations."
"It is unclear whether authorities suspect improper activity in these regions beyond China, or are simply placing a marker for a possible broader investigation. Either way, though, the global focus signals a fresh challenge for the bank and an escalation of the inquiry," the NYT report said.
The latest investigation into JP Morgan's activities comes just days after the US banking giant entered into a USD 13 billion settlement with the federal government over its mortgage practices in the run-up to the financial crisis.
Federal authorities led by the SEC's antibribery unit had begun an investigation into the bank’s hiring of the sons and daughters of China’s elite.
It emerged that the bank had hired the daughter of a Chinese railway official and the son of Tang Shuangning, a former Chinese banking regulator who is now the chairman of the state-controlled financial conglomerate China Everbright Group, according to a confidential government document reviewed by NYT.
The bank had even created a formal "Sons and Daughters" programme in 2006 after friends and family of China's elite jostled for positions at JPMorgan, the NYT report said.
"And what began as an effort to ferret out nepotism and avoid bribery accusations in the United States became a two-tiered process. Those well-heeled applicants appeared to enjoy less stringent standards and fewer interviews," it said, adding that in some cases, JPMorgan won business from companies with ties to the children.