JPMorgan Chase & Co’s hiring practices in China have come under the scrutiny of U.S. authorities.
The investigation has its roots in rumors that a multitude of children of powerful Chinese officials have been hired by the Chinese company, JP Morgan, with the objective of securing big business in the country.
Among others, JP Morgan has, reportedly, hired Tang Xiaoning, the son of Tang Shuangning, a former Chinese banking regulator. Presently, he is the chairman of the China Everbright Group, a state-controlled financial conglomerate.
Disclosure in regulatory filing
It is alleged that after Tang's joining, the Manhattan, New York-based financial services company, has managed to bag certain important contracts from the Everbright Group.
Another such case that has emerged is the hiring of Zhang Xixi, the daughter of a Chinese railway official. The official runs a company of his own, which now avails the advisory services of JP Morgan.
JP Morgan has referred to the inquiry by the U.S. Securities and Exchange Commission's anti-bribery unit in its quarterly filing this month.
JPMorgan had received "a request from the SEC Division of Enforcement seeking information and documents relating to, among other matters, the firm's employment of certain former employees in Hong Kong and its business relationships with certain clients," states the regulatory filing.
The allegations do not state that the bank hired unqualified employees. At this juncture, the organisation is also not accused of any wrongdoing.
Zhang and Tang no longer employees
Referring to Zhang’s case, the SEC has sought “documents sufficient to identify all persons involved in the decision to hire” her.
A spokesperson for the organisation has said that it is fully cooperating with the regulators and has already disclosed the matter in the 10-Q filing.
Both Ms. Zhang and Tang Xiaoning have left JPMorgan.
The SEC has sought Mr. Tang’s “employment file” and “communications” with JPMorgan ever since his departure in December 2012.