REGULATION

JP Morgan directors in bribery fray with Federal Reserve

Former senior employees at JP Morgan in Asia-Pacific allegedly offered individuals’ employment opportunities based on client referrals to win business.

By Hayley McDowell hayley.mcdowell@strategic-i.com March 13, 2017 9:59 AM GMT

Two former managing directors at JP Morgan in Asia-Pacific could be banned from working in the banking industry following anti-bribery violations.

Fang Fang and Timothy Fletcher allegedly offered internships and other employment opportunities between 2008 and 2013 to individuals referred by clients, prospective clients and foreign officials.

The Federal Reserve Board said the internships were offered to “obtain improper business advantages” in violation of US anti-bribery laws.

Fang was a managing director and head of china investment banking at JP Morgan, while Fletcher headed up recruitment and staffing for the firm.

An overview of the referral scheme explained both individuals prioritise referred candidates based on the importance of the client.

Despite the hires generally not being subject to the workload as non-referred candidates, were given the same salaries.

A report said Fang told Fletcher and other colleagues: “you all know I have always been a big believer of the sons and daughters program – it almost has a linear relationship with mandates, at least in China.

“We lost a deal to [a competitor] today because they got chairman’s daughter work for them this summer. I am supportive to have our own program.”

The Board is seeking to impose a $1 million fine against Fang and a $500,000 fine against Fletcher, as well as a permanent ban from working in banking.

In November 2016, the Board fined JP Morgan $61.9 million for similar offences and control deficiencies to the firm’s hiring practices.