JPMorgan Chase & Co will pay over $250 million to settle allegations by US authorities that the bank employed children of important Chinese decision makers to win business, according to Reuters.
The bank will reportedly pay the Securities and Exchange Commission and the Justice Department a combined $200 million, plus $50 million to the Federal Reserve.
There are no individual prosecutions at this time, sources familiar with the matter told Reuters. The bank managed to avoid criminal charges and was able to negotiate a rare nonprosecution agreement.
The SEC first opened an investigation into JPMorgan’s hiring practices in China in 2013.
The probe sparked debate about whether US business standards should be applied overseas – for decades US investment banks have hired the children of China’s politically connected.
The New York Times reports that JPMorgan employed the children of top Chinese officials who ran state-controlled companies actively looking for banks to help them go public.
The China settlement, first reported by Bloomberg, will finally put to rest the three-year headache for the bank over breaching U.S. anti-bribery laws.
According to Bloomberg, the Justice Department has also launched at least five investigations into other unidentified Wall Street banks over their hiring practices in China as part of an effort to determine if they “hired relatives of influential Chinese officials or executives of state-run enterprises to help obtain business or as a reward for steering business their way.”