JPMorgan Chase & Co (NYSE:JPM) is under the eyes of regulators in yet another case, according to a piece in the The New York Times today. The bank has been associated with preferential treatment in allocating jobs to the sons and daughters of powerful officials across Asia. The practice, which was an official program at JPMorgan Chase & Co (NYSE:JPM), may run afoul of laws designed to prevent bribing foreign governments.
The bank has not been accused of any specific wrongdoing in the case and it is cooperating with the government investigation according to The New York Times. The law that the bank may have broken is the Foreign Corrupt Practices Act, which is supposed to stop U.S. companies bribing foreign officials for favorable business terms.
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Preferential treatment at JPMorgan
The Sons and Daughters program was instituted by JPMorgan Chase & Co (NYSE:JPM) to avoid favoritism in the allocation of jobs to the children of powerful officials in foreign countries. However, reports from The New York Times, among others, have linked the program to the preferential treatment of those applicants, and suggestions that the program could run afoul of bribery law.
Bloomberg reporter Dawn Kopecki managed to get her hands on an internal spreadsheet from JPMorgan Chase & Co (NYSE:JPM) that appears to link the hiring of specific individuals to specific deals the investment bank is working on.
The Justice Department and the SEC are both taking a look at the practices according to reports, but there has been no formal accusation of wrongdoing, and a case may never come out of their review. Establishing that JPMorgan Chase & Co (NYSE:JPM) broke a law with their hiring practices might be very difficult for regulators.
Bribery law violation
The question for regulators is whether the preferential treatment of the children of foreign officials constitutes bribery, and whether they would be able to prove it in a court room. According to analysis, regulators will try to prove that the jobs were not real jobs, and were simply benefits given in kind.
JPMorgan Chase & Co (NYSE:JPM) is already defending itself in several other cases and investigations. The company has recently come under severe pressure from regulators on several fronts, depressing the company’s stock price as potentially huge settlements rear their heads.