U.S. Investigators Launch Probe Of JPMorgan Chase In China
The SEC has launched an investigation of JPMorgan Chase's operations in China, reportedly looking into whether the investment bank hired the children of high-ranking Chinese government officials in an effort to secure business.
The Wall Street Journal, quotes from a Securities and Exchange Commission filing that says U.S. regulators are investigating "business relationships with certain clients".
The New York Times writes that in one instance, JPMorgan reportedly hired a former Chinese banking regulator's son who later became chairman of the China Everbright Group: "After the chairman's son came on board, JPMorgan secured multiple coveted assignments from the Chinese conglomerate, including advising a subsidiary of the company on a stock offering, records show."
In another example, JPMorgan's Hong Kong office hired the daughter of a Chinese railway official. The official "was later detained on accusations of doling out government contracts in exchange for cash bribes, the government document and public records show."
"The former official's daughter came to JPMorgan at an opportune time for the New York-based bank: The China Railway Group, a state-controlled construction company that builds railways for the Chinese government, was in the process of selecting JPMorgan to advise on its plans to become a public company, a common move in China for businesses affiliated with the government. With JPMorgan's help, China Railway raised more than $5 billion when it went public in 2007."