Pedestrians walk past a signage of JPMorgan in its headquarters in New York. (Photo : Getty Images)
JPMorgan Chase is set to pay more than $200 million in settlement over allegations that it hired children of Chinese leaders as "quid pro quo" or, in a way to gain favor and win businesses in China, Reuters reported.
The investigation into the matter was launched by the U.S. Securities and Exchange Commission (SEC) in 2013. According to sources, no individual will be prosecuted in the case.
Sources said that about $130 million will be paid by the bank to SEC while about $70 million will be given to the Justice Department.
According to The New York Times, the SEC investigation focused on the issue of whether JPMorgan violated U.S. law on foreign bribery or the Foreign Corrupt Practices Act of 1997.
JPMorgan argued that it is common practice in China to hire well-connected employees, which it said was within the so-called gray area of foreign bribery laws. But U.S. authorities said that in several instances, some senior JPMorgan bankers have linked those jobs to their success in getting deals with China's state-run firms.
The probe also revealed that the hiring of Chinese "princelings" were formalized by the bank into its Sons and Daughters program, and even went to the extent of creating spreadsheets to monitor the hired employees assigned to specific clients.
In getting into the settlement, it is expected that JPMorgan will accept the findings and conclusions of the investigators, the report said.
A spokesman for JPMorgan declined to comment, as well as the spokesman for the Justice Department's criminal division in Washington and the United States attorney's office in Brooklyn. The SEC and the Federal Reserve also did not give their comments about the settlement.
The report said that the settlement was smaller than what was expected because the bank cooperated fully with investigators during the probe, which was the final move of the Obama administration's efforts to rid Wall Street of wrongdoings.
The settlement is seen as a moral victory for JPMorgan, which was able to avoid criminal liability, and successfully negotiated for a rare non-prosecution agreement.
