JPMorgan Chase & Co. (JPM), the biggest U.S. bank, disclosed that authorities in the U.S. and abroad are investigating the lender's hiring practices in Asia.
The bank has received subpoenas from the Securities and Exchange Commission and document requests from both the SEC and the U.S. Department of Justice, according to a company filing today.
Authorities in the U.S. and abroad are looking at the bank's employment of people referred by clients, potential clients and government officials as well as hiring "of certain former employees in Hong Kong, its business relationships with certain related clients in the Asia Pacific region and its engagement of consultants in the Asia Pacific region," the bank said in its filing.
The Justice Department and SEC are examining whether JPMorgan hired the children and other relatives of well-connected politicians and clients in hopes of steering business to the firm, possibly violating anti-bribery laws, a person with knowledge of the investigation said in August.
"The firm is cooperating with these investigations," the New York-based bank said in the filing today. "Separate inquiries on these or similar topics have been made by other authorities, including authorities in other jurisdictions, and the firm is responding to those inquiries."
The company's own internal review has uncovered red flags across Asia, including an internal spreadsheet that linked appointments to specific deals pursued by the bank, people with knowledge of the matter said in August.
The firm had flagged more than 200 hires for review at that time, the results of which JPMorgan shared with regulators, two people with knowledge of the examination said in August.
The scrutiny began in Hong Kong and was expanded to countries across Asia, looking at interns as well as full-time workers, two people said in August. The employees include influential politicians' family members who worked in JPMorgan's investment bank, as well as relatives of asset-management clients, the people said.
Wall Street firms have long enlisted people whose pedigree and connections can win business, a practice that doesn't necessarily violate the law.