"Citing a confidential United States government document," DealBook said "Federal authorities have opened a bribery investigation into whether JPMorgan chase hired the children of powerful Chinese officials to help the bank win lucrative business."
According to the report, "in one instance, the bank hired the son of a former Chinese banking regulator who is now the chairman of the China Everbright Group." Following the hiring, JPMorgan "secured multiple coveted assignments from the Chinese conglomerate," the report said.
DealBook was careful to say that "legal experts note that there is nothing inherently illicit about hiring well-connected people"
No kidding. That's how it's done in the U.S., so why not in China? JPMorgan would be quite foolish to refuse considering a well-qualified job applicant, just because their parents are well connected.This latest scrutiny of JPMorgan Chase comes under the SEC's enforcement of the Foreign Corrupt Practices Act, signed into law by President Jimmy Carter in 1977. According to Kathleen Shanley, an analyst with the unfortunately named Gimme Credit, "One wonders why [JPMorgan's activity in] China is the focus, given that children of the well-connected have remarkable luck in landing plum positions in various places right here at home." "JPM has not (as of this writing) been accused of bribery, but the timing of the news isn't great," Shanley wrote in a note Monday, referring to the criminal indictments filed last week against two of the bank's employees, in connection with the "London Whale" hedge trading losses of $6.2 billion during 2012. Guggenheim analyst Marty Mosby says "JPMorgan is under the microscope and what I think the regulators are doing is using them as an example to make sure that all of the largest banks understand they have to be above all the boundaries that are set. "They have to be whistle-clean in that there can be no perception they are pushing the envelope as they have in the past," he says. "In other words, site operations and risk management are more important than taking advantage of every opportunity you have in the market place. "We think a lot of these overhand issues are setting the tone for the regulatory view of JPM and other money center banks, and are weighing on the stock price relative to where it should be, based on returns," Mosby said.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV