The senior executive’s impending departure comes amid an investigation into JPMorgan Chase & Co. (NYSE:JPM)’s Asian hiring practices.
Though a key figure for U.S. investigators, Fang hasn’t been accused of any wrongdoing.
JPMorgan in hiring probe
Last year, JPMorgan Chase & Co. (NYSE:JPM) was under the eyes of regulators. The bank has been associated with preferential treatment in allocating jobs to the sons and daughters of powerful officials across Asia. The Sons and Daughters program was instituted by JPMorgan Chase & Co to avoid favoritism in the allocation of jobs to the children of powerful officials in foreign countries. However, various reports have linked the program to the preferential treatment of those applicants, and suggested that the program could run afoul of bribery law.
The U.S. and foreign authorities have escalated probes into whether JPMorgan Chase & Co. (NYSE:JPM)’s hiring practices in China and Hong Kong violated anti-bribery laws. The probe centers on whether JPMorgan hired the relatives of powerful Chinese officials and businessmen in order to win business.
JPMorgan stepped aside from IPO deals
Amid the concerns over the regulatory probe, JPMorgan Chase & Co. (NYSE:JPM) ceded work on the IPO of Tianhe Chemicals, a privately owned maker of specialty chemicals. As Tianhe Chairman Qi Wei’s daughter, Joyce Wei, had worked for JPMorgan the bank wanted to avoid being accused of getting the business through her connections, though the bank started handling the IPO before her joining.
JP Morgan also withdrew from a syndicate of underwriters working on a $3 billion listing by China Everbright Bank Co., Ltd (SHA:601818) (HKG:0165). According to media reports, the bank was being investigated over its hiring of the son of Tang Shuangning, a former banking regulator who is now chairman of the state-run financial conglomerate Everbright Group.
Emails from the senior banker
Citing sources familiar with the matter, The Wall Street Journal reported today that JPMorgan Chase & Co. (NYSE:JPM) has provided U.S. prosecutors with emails from Mr. Fang discussing the hiring of the son of China Everbright Group Chairman Tang Shuangning. The FBI and the prosecutors from the Justice Department are examining whether the son’s employment helped the U.S. bank win assignments from Everbright.
The regulators have been probing the hirings of JPMorgan Chase & Co. (NYSE:JPM) to determine whether the bank has violated the Foreign Corrupt Practices Act of 1977. According to a Bloomberg report, the U.S. scrutiny of JP Morgan began in Hong Kong and expanded to countries across Asia, looking at interns as well as full-time workers.