Litigation Against Banks Continues
JPMorgan Chase & Co. (NYSE:JPM) has settled both civil and criminal cases related to charges that it tried to win business in Asia by hiring the family members of well-connected political players.
The megabank will have to shell out a whopping $264.0 million for its violations of foreign corrupt practices law, something which all American companies are supposed to abide by. (Source: “J.P. Morgan to Pay $264 Million to End Criminal, Civil Foreign Corruption Cases,” The Wall Street Journal, November 17, 2016.)
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Although some of the actions undertaken by JPMorgan may have been standard operating procedure in their locales, they were deemed untoward by the U.S. Justice Department, the Securities and Exchange Commission (SEC), and the Federal Reserve.
The bank admitted to opening a “Sons and Daughters” program which would pair job openings with job candidates whose relations were linked to imminent deals in the country. The entire point of the program was to put those candidates at the front of the line, but they needed a “directly attributable linkage to business opportunity.”
According to the report, 100 such job candidates were hired for internships and full-time positions.
“The so-called Sons and Daughters Program was nothing more than bribery by another name,” the head of the Justice Department’s criminal division, Leslie Caldwell, said. (Source: Ibid.)
Those are strong words from someone with enough clout to make business uncomfortable for the banks, especially since several banks remain under investigation for similar activities. Some analysts are worried that this settlement could serve as a precedent for more to come.
Credits: Flickr.com/Thomas Hawk
However, the political climate is changing in Washington, D.C. President Obama and his appointees in the bodies that regulate Wall Street are on their way out, while President-elect Trump is merely at the outset of a four-year term.
From his recent conciliatory tone towards banks, his pledge to “dismantle” the Dodd-Frank legislation, and his staffing of free-market ideologues, it seems unlikely that he will give the green light for further prosecution of financial crimes.
Nonetheless, the JPMorgan case is settled. Spokesman Brian Marchiony says the bank is “pleased that our cooperation was acknowledged in resolving these investigations” and that the conduct was “unacceptable.”
