The legal probe on
JPMorgan Chase & Co.
) hiring practices now extends beyond Hong Kong to countries
across Asia, involving more than 200 interns and full-time staff.
The initial investigation revealed internal spreadsheets
depicting job offers connected with business deals.
The probe began this May with JPMorgan hiring the offspring of
influential Chinese government officials. Allegedly, the bank
lured people with jobs, and in return, the newly recruited
employees had to boost business by exploiting their government
contacts and records.
The aforementioned hiring practice breaches the US Foreign
Corrupt Practices Act and if the charge is proven, JPMorgan's
business in Asia is likely to suffer. The investigation adds to
the legal hassles that are already afflicting the bank.
Further, the probe strengthened with the U.S. Justice Department
joining the Securities and Exchange Commission in the scrutiny.
On the other hand, a Hong Kong-based JPMorgan spokesperson Marie
Cheung affirmed the bank's cooperation with regulatory bodies
during the probe in all possible ways.
Asia, comprising emerging economies, is a lucrative domain for
profit-seeking organizations. Major banks in the U.S. are eyeing
the region in an attempt to strengthen their foothold in the
fastest growing markets. So JPMorgan is no exception.
In a rush to fare better than its peers, the company may have
adopted unfair means to expand its business. While it is not a
crime to appoint officials with influence, creating perfunctory
positions for bolstering the business is illegal. Further
progress in the probe alone will reveal as to whether JPMorgan
recruited personnel judging their qualifications or not.
In the past, there have been instances in which large banking
institutions have indulged in similar malpractices.
The Goldman Sachs Group, Inc.
) had once hired the former Chinese president Jiang Zemin for its
private investment arm.
Moreover, in 2012, a former
) adviser was imprisoned on accusations of bribing a Chinese
official to procure profitable real estate investments for the
JPMorgan currently holds a Zacks Rank #3 (Hold). A better
performing bank is
), which has a Zacks Rank #1 (Strong Buy).
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