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JPMorgan Chase bribery investigation widens

JPMorgan Chase bribery investigation widens

Michael Webster: Syndicated Investigative Reporter

JPMorgan Chase & Co.’s (JPM) a leading member of the Big Four banks of the United States, is being investigated by the SEC and now the U.S. Justice Dept. JPMorgan Chase & Co , led by Chief Executive Officer Jamie Dimon, 57, is contending with criminal investigations of its energy-trading and mortgage-backed securities operations. The firm also faces U.S. probes of its anti-money-laundering safeguards, foreclosures, credit-card collections, and $6.2 billion in losses last year on botched derivatives bets by a U.K. trader known as the London Whale.

Facing yet more developing revelations and adding to the scandal The Justice Department joined the Securities and Exchange Commission for more possible crimes and improprieties. The current federal Securities and Exchange Commission (SEC) is investigating whether JPMorgan Chase violated the U.S. Foreign Corrupt Practices Act by hiring Chinese relatives including sons and daughters of China’s super-wealthy Communist Party officials and China’s high ranking military officers, apparently all in an effort to secure huge business contracts from China’s state-owned enterprises. After each appointment, the bank got assignments from firms connected to the new hires’ parents.

If true that would also violate bribery laws. The U.S. Foreign Corrupt Practices Act bars companies from making payments or providing anything of value to government officials to win business.

The SEC requests have focused on two people in China whose parents have leadership roles at a state-controlled financial company and a railway, the New York Times reported Aug. 17, citing a U.S. government document it had reviewed.

As the investigation widens new evidence in the probe of hiring practices in China has uncovered red flags across Asia, including an internal spreadsheet that linked appointments and names to specific deals pursued by the bank.

While it is not illegal for U.S. companies to hire people who are politically connected, doing so with the expectation of winning business from their relatives is considered bribery.

The probe began in Hong Kong and has now spread to countries across Asia and Europe and elsewhere, scrutinizing interns as well as full-time workers. The so called employees include influential politician’s family members who were employed in the investment bank, along with relatives of asset-management clients.

The Last week, two of the bank’s former London traders — Javier Martin-Artajo and Julien Grout — were indicted for allegedly concealing massive bank losses in the infamous “London whale” debacle. The losses of which were reported as $2 billion. Now, it turns out, those losses were seriously under counted; the real losses are around $6.2 billion.

SEC will hunt for evidence showing “these weren’t real jobs, that they were only there because their father or mothers were important public officials,” said Dan Hurson, a former U.S. prosecutor and SEC lawyer who runs his own Washington practice. “If the public official requested the job for the child that would be a strong indication to the company that the official was seeking and receiving something of value.”

It is hardly shocking that JPMorgan Chase may be guilty of this practice; what else would one expect when one of the wealthiest and most corrupt banks in the world partners with one of the wealthiest, most corrupt, and ruthless regimes in the world? But JPMorgan Chase is hardly alone; virtually all of the big investment banks operating in China have been using the “hire-a-princeling” strategy as standard operating procedure for the past two decades.
So far, the bank’s CEO, Jamie Dimon, has not only managed to evade any personal responsibility for the company’s ongoing massive scandals, but continued to profit — at taxpayer expense. Dimon, a top Wall Street insider, continues to serve as a Class a Director of the Board of Directors of the New York Federal Reserve and JPMorgan Chase continues to enjoy its sweetheart status with the Fed as a “primary dealer,” giving it access to the Fed’s magic money-out-of-thin-air machine. For helping create the mortgage meltdown crisis of 2008, Dimon’s bank was rewarded with $390 billion in emergency “loans” from the Fed.


New American

William F. Jasper

Jerome Favre/Bloomberg

Photographer: Jerome Favre/Bloomberg

Bloomberg Contributing Editor David Plouffe and Rick Rieder, managing director at BlackRock

William Black, a professor at University of Missouri-Kansas City, talks about a U.S. regulatory probe of JPMorgan Chase & Co.’s hiring practices in China. Black speaks with Tom Keene, Sara Eisen, Alix Steel and Lee Pacchia on Bloomberg Television's "Surveillance." (Source: Bloomberg)

Peter Foley/Bloomberg

Mark Kornblau, a company spokesman

David Marshall,

The bank has hired law firm Paul Weiss Rifkind Wharton & Garrison LLP,. It also has enlisted King & Wood Mallesons and Herbert Smith Freehills, Paul Weiss is handling the U.S. probe

The Serious Fraud Office, which enforces U.K. laws targeting fraud, bribery and corruption

Dimon’s Push

Michael Passman, a spokesman at the Justice Department, and John Nester at the SEC declined to comment.

Michael Webster’s Syndicated Investigative Reports have been read worldwide, in 100 or more U.S. outlets and in at least 136 countries and territories. He publishes articles in association with global news agencies and media information services with more than 350 news affiliates in 136 countries. Many of Mr. Webster’s articles are printed in six working languages: English, French, Arabic, Chinese, Russian and Spanish. With ten more languages planed in the near future.

· Mr. Webster is America's leading authority on Venture Capital/Equity Funding. He served as a trustee on some of the nation’s largest trade Union funds. A noted Author, Lecturer, Educator, Emergency Manager, Counter-Terrorist, War on Drugs and War on Terrorist Specialist, Business Consultant, Newspaper Publisher. Radio News caster. Labor Law generalist, Teamster Union Business Agent, General Organizer, Union Rank and File Member Grievances Representative, NLRB Union Representative, Union Contract Negotiator, Workers Compensation Appeals Board Hearing Representative. Mr. Webster represented management on that side of the table as the former Director of Federated of Nevada. Mr. Webster publishes on-line newspapers and and does investigative reports for print, electronic and on-line News Agencies. All of Mr. Webster's articles, books/CD's can be read or downloaded free at: or MICHAEL WEBSTER'S OTHER WRITINGS Contact e-mail:

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