A top Chinese regulator with influence over insurance companies personally asked JPMorgan’s chief executive Jamie Dimon for a “favor” to hire a young job applicant, the New York Times’ Dealbook said Sunday.
The applicant was a family friend of the Chinese insurance regulator, Xiang Junbo. She was later hired.
During a 2012 meeting with Dimon, Xiang introduced his interpreter “as the daughter of a close friend and a potential JPMorgan employee,” Dealbook said.
“In an awkward moment for the applicant, she translated as Mr. Xiang extolled the benefits of hiring her.”
Dealbook based its story on “a previously unreported email, one of several documents that JPMorgan recently turned over to federal authorities as part of an investigation into hiring at the bank.”
The U.S. Foreign Corrupt Practices Act prohibits giving or promising to give anything of value to a foreign official in order to obtain or retain business or gain an unfair advantage. Hiring a family member or friend of a government official isn’t always a violation of the FCPA. But if the person is hired to reward or induce an official to award work, that could be an offense.
“JPMorgan was seeking lucrative work from Chinese insurance companies,” Dealbook said. “Mr. Xiang, a former banker who had been trying to secure a JPMorgan job for his young family friend a month before the meeting, would have a good deal of sway over those companies.”
U.S. authorities are investigating whether hiring at JPMorgan and at least six other big banks “was done explicitly to win business from Chinese companies. The authorities could decide to bring charges against individuals or a bank if they find such activity to be in violation of anti-bribery laws,” Dealbook said.
JPMorgan reportedly opened an internal investigation that flagged more than 200 hires for review.
A special internship was created for the applicant recommended by Xiang following vetting by the bank’s compliance department and multiple interviews. JPMorgan “assigned her to a group within the bank’s New York headquarters that is focused on the insurance business. She later landed a full-time job at the bank,” Dealbook said.
“JPMorgan said Mr. Dimon had nothing to do with the decision to hire the young woman, described within the bank as well qualified. And like the CEO of any large company, Mr. Dimon can be expected to meet with many people in a given day. According to a person briefed on the investigation, he is not suspected of any wrongdoing,” Dealbook said.
In the months after the meeting between Dimon and Xiang, JPMorgan landed at least four business deals with Chinese insurance companies that Xiang oversaw, Dealbook said.
“In recent months, according to [public] filings, five top insurance companies with headquarters in mainland China or Hong Kong have become JPMorgan clients,” the report said.
The Dealbook story by Jessica Silver-Greenberg and Ben Protess is here.
Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.