An internal investigation into JPMorgan's hiring practices in Asia is examining the employment of about 200 people for instances of possibly illegal nepotism, a source said, indicating that the bank's hiring issues may extend beyond the two cases about which regulators had initially asked.
The Securities and Exchange Commission had requested information on two deals the bank may have won by hiring relatives of key officials, including the daughter of a Chinese state railway official, the person said. U.S. anti-bribery laws prohibit hiring any individual in exchange for a specific favor or benefit from an outside business partner or client.
JPMorgan disclosed the inquiry in its quarterly regulatory filing earlier this month. Bloomberg reported late Wednesday that the Department of Justice is also involved in the probe. The department has not requested anything from JPMorgan related to the SEC's investigation, the source said.
Peter Carr, a spokesman for the DOJ, declined to comment. Florence Harmon, a spokeswoman for the SEC, declined to comment. JPMorgan representatives have said the bank is cooperating with investigators.
JPMorgan's internal probe is still in preliminary stages, and has not reached any conclusions about whether any of the approximately 200 hirings were illegal.
(Read more: Has JPMorgan become a 'piñata bank'?)
Launching an internal investigation in response to a regulatory review or criminal probe is standard practice for large companies, partly because prosecutors are more lenient when companies find and admit wrongdoing.
After JPMorgan CEO Jamie Dimon lost credibility for understating the seriousness of the bank's "London Whale" derivatives losses last year, executives have been more inclined to disclose legal inquiries long before they could become material, according to a person familiar with the matter.
(Read more: JPMorgan bribe probe expands: Report)
The company disclosed in a filing earlier this month that it had received at least four requests for information from government agencies over matters that are not yet the subject of litigation. In one of those, JPMorgan said the SEC's Division of Enforcement asked for information and documents about the firm's "employment of certain former employees in Hong Kong and its business relationships with certain clients."
Regarding the London Whale trading losses last year, Dimon initially said that reports of possible losses from the derivatives trades were a "tempest in a teapot." The company was later criticized in separate government investigations for holding back information from authorities on the derivatives and on trades in electric power markets.