JPMorgan Chase will pay settlements worth $264 million for hiring the children of Chinese executives in exchange for business. A three-year investigation found that the hires constitute bribery, and five more banks are under investigation.
An SEC press release describes the findings:
According to an SEC order issued today, investment bankers at JPMorgan's subsidiary in Asia created a client referral hiring program that bypassed the firm's normal hiring process and rewarded job candidates referred by client executives and influential government officials with well-paying, career-building JPMorgan employment. During a seven-year period, JPMorgan hired approximately 100 interns and full-time employees at the request of foreign government officials, enabling the firm to win or retain business resulting in more than $100 million in revenues to JPMorgan.
"JPMorgan engaged in a systematic bribery scheme by hiring children of government officials and other favored referrals who were typically unqualified for the positions on their own merit," said Andrew J. Ceresney, Director of the SEC Enforcement Division. "JPMorgan employees knew the firm was potentially violating the FCPA yet persisted with the improper hiring program because the business rewards and new deals were deemed too lucrative."
A company statement is nowhere to be found. The major news articles don't include a company quotation, and neither the Press Releases or News and Announcements sections of the JPMorgan website list a response.
According to a statement by the U.S. Department of Justice, the company has taken some internal action:
JPMorgan APAC also took significant employment action against six employees who participated in the misconduct resulting in their departure from the bank, and it disciplined an additional 23 employees who, although not involved in the misconduct, failed to effectively detect the misconduct or supervise those engaged in it.
- How does this happen inside an organization? Consider who is involved in hiring decisions-sometimes a lot of people.
- Should JPMorgan make a statement about the settlement? Complete an audience analysis before you decide, and consider why the company leaders might choose to stay silent.