U.S. regulators have launched a bribery investigation into whether JPMorgan Chase & Co. hired the children of powerful Chinese officials to help the bank win business in China.
A report posted in the New York Times’ online edition Saturday cited a confidential U.S. government document as its source for the story.
The Times said the bank hired Tang Xiaoning, the son of Tang Shuangning, a former Chinese banking regulator who is now the chairman of the China Everbright Group, a state-controlled financial conglomerate.
After the son joined JPMorgan, the bank secured several important assignments from the Chinese corporation, including advising a subsidiary of the company on a stock offering.
According to securities filings, JPMorgan own a stake in the subsidiary.
The Hong Kong office of JPMorgan also hired Zhang Xixi, the daughter of a now-disgraced Chinese railway official, and went on to help advise his company, which builds railways for the Chinese government, on its plans to become a public company, the Times said.
JPMorgan, which has had numerous recent run-ins with federal agencies, indirectly referred in its 10-Q quarterly filing this month to the inquiry by the U.S. Securities and Exchange Commission’s anti-bribery unit.
‘We publicly disclosed this matter in our 10-Q filing last week and are fully cooperating with regulators,’ said a Hong Kong-based spokeswoman for JPMorgan.
JPMorgan said in its filing that it had received ‘a request from the SEC Division of Enforcement seeking information and documents relating to, among other matters, the firm’s employment of certain former employees in Hong Kong and its business relationships with certain clients.’
The report stressed that the government document did not definitively link JPMorgan’s hiring practices to its ability to win business.
It also said there had been no suggestion that the employees hired by the bank were unqualified and said JPMorgan, although under investigation, had not been accused of any wrongdoing.
Both Zhang and Tang both have left JPMorgan, the newspaper said.
According to Zhang’s Facebook and LinkedIn profiles, the young woman graduated from Stanford University with a degree in management science and engineering.
Her father, the former deputy chief engineer for China’s railway system, has been accused of selling lucrative government contracts to the highest bidder.
News of the bribery probe in China comes just days after federal prosecutors and the FBI announced criminal charges against two former JPMorgan Chase & Co. employees on suspicion that they tried to conceal losses incurred by the infamous ‘London Whale.’
Javier Martin-Artajo and Julien Grout are accused of trying to conceal the investment bank’s $6billion trading loss last year, according to a separate the New York Times.
This article originally appeared on dailymail
