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Feds probe JPMorgan over Chinese hires

The firm reportedly hired the children of powerful Chinese officials to win business



Natasha Lennard
August 18, 2013 7:32PM (UTC)

According to reports, JP Morgan is facing a bribery probe by the SEC following the hiring of the children of powerful Chinese officials. Via Reuters:

For JPMorgan, the China hiring probe comes while the bank is under intense scrutiny following the $6 billion trading loss it suffered in the "London whale" derivatives scandal. Federal prosecutors on Wednesday brought criminal charges against two former JPMorgan traders - Javier Martin-Artajo and Julien Grout - accusing the pair of deliberately understating losses on the trades on the bank's books.

A report posted in the Times' online Saturday edition cited a confidential U.S. government document as its source for the story on the China hiring probe. The Times said the probe is a civil investigation by the Securities and Exchange Commission's anti-bribery unit.

The Times said JPMorgan hired Tang Xiaoning, the son of Tang Shuangning, a former Chinese banking regulator. Tang Xiaoning is now the chairman of the China Everbright Group, a state-controlled financial conglomerate.

After the son joined JPMorgan, the bank secured several important assignments from the Chinese conglomerate, including advising a subsidiary of the company on a stock offering, the Times reported.

The Hong Kong office of JPMorgan also hired Zhang Xixi, the daughter of a now-disgraced Chinese railway official, and went on to help advise his company, which builds railways for the Chinese government, on its plans to become a public company, the Times said.


Natasha Lennard

Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com.

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Related Topics ------------------------------------------

Bribery China Hong Kong Jpmorgan Chase Sec

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