Two former executives from J.P. Morgan Chase (JPM) are facing lifetime bans from the banking sector and hefty fines for their role in hiring children of Chinese elites, allegedly in the hopes of winning business deals.
The bank has already been fined by U.S. regulators for $264 million back in November for the hiring practice. CNN reports that the scheme, in which jobs and internships were allegedly offered to children of Chinese elites regardless of their qualifications, has been dubbed a “systemic bribing scheme” by regulators.
Now, the Federal Reserve wants to bar former executives Timothy Fletcher and Fang Fang permanently from working in the banking industry for having allegedly violated U.S. anti-graft laws. Fang, who ran J.P. Morgan’s Chinese investment bank, has also been slapped with a $1 million fine, while Fletcher, who ran the hiring scheme and also led the group’s junior resource management unit, is looking at a $500,000 penalty alongside the ban.
In its filings against the duo, the Fed alleges that, between at least 2008 and 2013, the duo hired “individuals referred by foreign officials, clients and prospective clients” for “internships and other employment opportunities in order to obtain improper business advantages.”
The implicated former execs’ behavior “involves personal dishonesty or a willful or continuing disregard for the safety and soundness” of J.P. Morgan, charges the Fed.
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Authorities claimed that around 100 interns and full-time employees were picked up through the so-called “Sons and Daughters” scheme, and that J.P. Morgan even had spreadsheets tracking how frequently positions offered translated into deals, reports CNN.
