JPMorgan Chase to pay 264 million dollars in Chinese bribery case
JPMorgan Chase has agreed to pay 264.4 million US dollars (£212 million) in fines to US federal authorities over claims it bribed Chinese officials.
The deal will settle charges that it hired friends and relatives of Chinese officials in order to gain access to banking deals in that country.
JPMorgan's Asia affiliate allegedly created a quid pro quo programme that would hire the children and friends of high-ranking Chinese officials, regardless of qualifications, in order to gain favour and win banking deals.
The bank will avoid criminal bribery charges as part of the deal reached with the Department of Justice, the Securities and Exchange Commission and other regulators in the US.
The bank reached what is known as a non-prosecution agreement over the allegations.
"Awarding prestigious employment opportunities to unqualified individuals in order to influence government officials is corruption, plain and simple," assistant attorney general Leslie Caldwell said.
The United States has one of the strictest bribery laws in the world, known as the Foreign Corrupt Practices Act, where it effectively bans US companies from paying foreign government officials to obtain or retain business.
While JPMorgan did not pay Chinese officials directly, federal authorities said the hiring of unqualified persons related to Chinese officials was effectively the same thing.
The only candidates who would fall under this programme had to have a "directly attributable linked to business opportunity" to be considered for hiring. The Department of Justice estimates the Asia affiliate of JPMorgan earned at least 35 million US dollars (£28 million) in profits from Chinese state-owned companies.
Ms Caldwell called the JPMorgan programme, which was called the Sons and Daughters Programme, was "nothing more than bribery by another name".
Despite those strong words, the bank will avoid criminal bribery charges as part of the deal.
The Justice Department said it agreed to the non-prosecution agreement due in part to JPMorgan's own cooperation in the case, where the bank undertook an internal investigation and fired six employees tied to the program and disciplined another 23 employees for their involvement.
"We're pleased that our cooperation was acknowledged in resolving these investigations," said JPMorgan spokesman Brian Marchiony.
"The conduct was unacceptable. We stopped the hiring programme in 2013 and took action against the individuals involved."
According to the terms of the deal, JPMorgan has agreed to pay 72 million US dollars (£58 million) to the Department of Justice as well as 130.5 million dollars (£105) in penalties to the Securities and Exchange Commission. It will also pay 61.9 million dollars (£50 million) to the Federal Reserve in civil penalties.