Two senior executives at JPMorgan associated with a U.S. investigation into possible corrupt hiring practices in Asia will exit the bank in the coming weeks, the Wall Street Journal has reported.
Todd Marin, vice chairman of Asia Pacific investment banking, and Catherine Leung, vice chairwoman of Asia investment banking, will leave the bank at an unspecified date in the near future, the paper reported.
Neither executive has been accused of wrongdoing, but both have stock options vesting soon, and the bank did not want them to receive them until the investigation was concluded, the Journal reported.
JPMorgan is under scrutiny by U.S. prosecutors, along with almost all other major international investment banks, for possible violations of the Foreign Corrupt Practices Act, relating to its hiring practices in Asia.
The bank is believed to have hired so-called princelings -- the children of senior Chinese officials --- as a means of securing lucrative investment work from the government or from state-owned firms.
A separate investigation carried out by the Journal highlighted the example of Gao Jue, who was hired by the bank despite performing poorly in job interviews, accidentally sending a sexually explicit email to a bank human resources worker, and being described as “immature, irresponsible and unreliable,” in internal bank emails.
Gao however, is the son of China's commerce minister, Gao Hucheng. In emails published by the Financial Times, Fang Fang, then chief executive of JPMorgan China, wrote to Gaby Abdelnour, then the bank’s head of Asia, to say that Gao Hucheng, had “spent [a] long time explaining to me why it is important for the son to find another position within JPM ... because he is desperate to maintain his hard-won H1-B visa which is under JPM sponsorship.”
The Gaos were concerned that the younger man's role at the bank might be in jeopardy, as the company was laying off staff at the time.
“The father indicated to me repeatedly that he is willing to go extra miles to help JPM in whatever way we think he can,” the email continued. “And I do have a few cases where I think we can leverage the father’s connection.”
In addition, JPMorgan's 2013 awarding of a $75,000 per-month contract to an obscure consulting firm run by one 'Lily Chang' drew scrutiny from U.S. authorities, the New York Times reported. Chang is an alias of Wen Ruchun, the daughter of former Chinese Premier Wen Jiabao.
JPMorgan paid Wen’s firm a total $1.8 million between 2006 and 2008, the paper said, and Wen's firm told the bank that it had “introduced and secured” business for JPMorgan from the state-run China Railway Group. The bank was an underwriter in the company’s 2007 initial public offering, which raised about $5 billion.
The bank has not been accused of any wrongdoing in the investigation. Other banks facing similar scrutiny from U.S. authorities include Goldman Sachs, Citi, Morgan Stanley, UBS, Credit Suisse, Deutsche Bank and Bank of America Merrill Lynch, according to the South China Morning Post.