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TheStreet Open House

JPMorgan Hiring Practices in Asia Attract More Scrutiny

Stocks in this article: JPMUBS

NEW YORK ( TheStreet) -- JPMorgan Chase (JPM) said in a regulatory filing Friday that its hiring practices in Asia, under investigation by the Securities and Exchange Commission, have also attracted scrutiny from the Department of Justice and agencies from other jurisdictions.

The SEC has been investigating the firm's hiring practices in Hong Kong and the Asia Pacific region to see if they violated anti-bribery laws. The bank is accused of employing family members of Chinese officials in order to gain business.

The bank said it has received subpoenas and request for documents from the SEC. It has also received similar requests for documents from the Department of Justice.

The bank said it is cooperating with the investigations.

JPMorgan also said it had received information requests from various government authorities regarding its foreign exchange trading business. The bank said the investigations were in the "early stages" and that it was cooperating with the authorities.

Several banks including Deutsche Bank, UBS (UBS) have said that they have received requests for information about their foreign exchange activities as global regulators investigate allegations of currency manipulation.

JPMorgan is facing multiple lawsuits, investigations and enforcement actions on a wide range of activities, though the biggest chunk of the litigation is tied to the mortgages and mortgage-backed securities sold during the boom years by its Bear Stearns and Washington Mutual units, which were acquired in 2008 through government-supported takeovers.

The bank is in the midst of negotiating a record $13 billion settlement with the Department of Justice, though its lawyers are still trying to find a way they can avoid being held responsible for litigation related to Washington Mutual, which the bank purchased out of receivership from the Federal Deposit Insurance Corporation.

The sooner the bank can reach a settlement, however, the better, as investors would be happy to see a major chunk of litigation resolved.

As the bank disclosed when reporting third-quarter earnings, JPMorgan believes the range of reasonably possible losses in excess of reserves as of Sept. 30 was $5.7 billion. This is a staggering amount, especially considering that the bank had legal reserves totaling $23 billion as of September.

-- Written by Shanthi Bharatwaj in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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