JPMorgan’s Sons and Daughters Program: Corrupt or Just Competitive?
Wall Street has pretty much been a regulatory punching bag ever since the financial crisis. Vindicated by the errors — and in some cases, institutional incompetence — of the financial industry, regulators have investigated and prosecuted their way through nearly every closet of the big banks, shaking out the dust and cleaning out the skeletons where they found them.
JPMorgan Chase (NYSE:JPM) has been at the heart of these efforts recently, and following a record-setting $13 billion penalty issued for the bank’s involvement in selling toxic mortgages, regulators have moved on to investigating claims that it violated the Foreign Corrupt Practices Act.
Specifically, U.S. officials are investigating whether JPMorgan’s hiring of or business dealings with the children of well-connected people in China — such as leaders within the Communist party or top executives at state-run enterprises — violated the act, which forbids bribery. While there is no law preventing companies from hiring well-connected executives or practicing nepotism, hiring their children with the explicit goal of using the act to land new business could be considered bribery.