JP Morgan has agreed to pay a settlement of $264 million after the Securities and Exchange Commission (SEC) found it handed out internships and jobs to government officials.
Investment bankers at JP Morgan’s Asia-Pacific subsidiary had bypassed the firm’s usual hiring process and rewarded those referred by government officials or clients with “well-paying, career-building JP Morgan employment.”
During a seven year period, roughly 100 interns and full-time employees were hired at the request of foreign government officials, enabling the bank to win or retain business.
Andrew Ceresney, director of the SEC enforcement division, said the bank had engaged in a “systematic bribery scheme by hiring children of government officials and other favoured referrals who were typically unqualified for the positions on their own merit.”
The SEC also revealed JP Morgan’s misconduct “was so blatant” that investment bankers had created a spread sheet, ‘referred hires vs. revenues’ to track the money flow from clients whose referrals were rewarded with jobs.
JP Morgan has agreed to settle charges and pay the Federal Reserve Board of Governors $61.9 million, the Justice Department $72 million and the SEC $130 million.