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JPMorgan Chase & Co Under Investigation

Eric Parra |
August 18, 2013 | 11:18 a.m. PDT

Executive Producer

JPMorgan and Chase have had their own share of hardships (creative commons)
JPMorgan and Chase have had their own share of hardships (creative commons)
Authorities have opened up a case regarding JP Morgan Chase & Co, investigating whether or not they hired children of powerful Chinese officials to help win over business in China. 

From Reuters:

“Investment banks have a long history of employing the children of China's politically connected. While close ties to top government officials is a boon to any banking franchise across the world, it's especially beneficial in China, where relationships and personal connections play a critical role in business decisions.

The approval process for a stock offering in China, for example, is one area that has come under criticism inside and outside the country for being opaque and prone to cronyism.”

The situation for JPMorgan comes during a time where the bank is already under watch from a $6 billion trading loss. The loss is referred to as the “London Whale” derivatives scandal, and was already covered up by JPMorgan’s traders. 

READ MORE HERE: JPMorgan Chase Reports Billions Lost

On Wednesday, federal prosecutors announced criminal charges against the former JPMorgan traders, Javier Martin Artajo and Julien Grout, accusing them of understating losses on the trades.

Reports mention that a confidential U.S. government document cites China as the hiring probe in a civil investigation by the Securities and Exchange Commission's anti-bribery unit. The report says that JPMorgan hired Tang Xiaoning, the son of Tang Shuangning, a former Chinese banking regulator, as well as Zhang Xixi, the daughter of a former Chinese railway official.

In its filing, JP Morgan said that it had received "a request from the SEC Division of Enforcement seeking information and documents relating to, among other matters, the firm's employment of certain former employees in Hong Kong and its business relationships with certain clients."

Reach Executive Producer Eric Parra here.



 

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