JPMorgan to pay $264.4 million in Chinese bribery scandal
JPMorgan Chase & Co. was slapped a $264.4 million fine by the federal officials to settle charges which proved that it employed relatives and friends of Chinese officials in order to obtain access to banking deals in China. JPMorgan's Asia subsidiary purportedly created a program that hired underqualified children of high-ranking Chinese officials to win favor and acquire banking contracts.
JPMorgan's 'Sons and Daughters Program'
JPMorgan's program that executed unlawful hiring was called the 'Sons and Daughters Program' and ran from 2006 to at least 2012. The bank had an anti-corruption law aimed to avoid any "quid pro quo arrangement", however, saw several lackluster hires who got jobs because of their relationship to decision-makers in Asia. At least 6 clients were a part of the scheme.
$100 million worth profit earned through the scam
At least a 100 interns and full time employees were hired under the "Sons & Daughters Program," that facilitated JPMorgan to obtain business that generated almost $100 million in revenues for the bank.
America's stringent anti-corruption laws
The Foreign Corrupt Practices Act prevents US companies from bribing foreign government executives to help them obtain business. Even though JPMorgan didn't pay Chinese officials, the US officials said what it was doing meant the same thing. The authorities said the offense was "so blatant that JP Morgan investment bankers made 'referral hires vs revenue' spreadsheets" to trace the money flow.
Leniency to the bank for cooperation
While the bank has been fined, neither the JPMorgan bank nor any individual worker will be prosecuted. This is because the bank willingly cooperated in the investigation and "quickly turn over records and change global policies to eliminate questionable hiring practices at the start of the inquiry". JPMorgan officials also said that the quid pro practice had been discontinued since 2013.
