- Bank could pay around $200 million to end investigations
- Probes focused on whether bank hired people to win business
JPMorgan Chase & Co. is expected to settle later this year with the U.S. Justice Department and Securities and Exchange Commission to end a three-year probe into whether it inappropriately hired the children of Chinese decision-makers to win business, according to people familiar with the matter.
The bank is expected to pay around $200 million in the settlements over its hiring practices, according to one of the two people, who both asked not to be named because they weren’t authorized to discuss the negotiations publicly.
The SEC and JPMorgan declined to comment. The Justice Department didn’t respond to a request for comment.
At issue in the inquiry is whether the bank hired relatives of influential Chinese officials or executives of state-run enterprises to help obtain business or even as a reward, and whether that ran afoul of the Foreign Corrupt Practices Act of 1977, which makes it illegal to provide pay or benefits to a foreign government official. The law also specifies what records must be kept to ensure compliance.
The SEC and then the Justice Department began looking into possible violations at New York-based JPMorgan, the largest U.S. bank, in 2013. A spreadsheet emerged showing the firm tracked hires in Asia and any related business it won there, two people familiar with the matter have said.
For two decades, Wall Street banks have led the way in bringing Chinese companies public overseas, thanks to their global reach, distribution platforms and ability to ensure billions of dollars of stocks get sold at premium prices. While the Justice Department’s investigation initially focused on JPMorgan, it widened to include other Wall Street firms, people familiar with the matter have said.
News on JPMorgan nearing an accord with U.S. agencies was reported earlier Thursday by the Wall Street Journal. The bank is likely to enter into a nonprosecution agreement, whereby it admits to wrongdoing and agrees to reforms but avoids charges, the newspaper said, citing people familiar with the situation.
JPMorgan shares slipped 24 cents, or 0.4 percent, to $63.69 at 4:06 p.m. in New York trading. The company has declined 3.5 percent this year as banks struggle with stagnant revenue and low interest rates.