Top Stories
Top Stories

JPMorgan faces fresh scrutiny over Asia hiring practices

Tom Braithwaite in New York
A man walks by One Chase Plaza in lower Manhattan
Getty Images

JPMorgan Chase's hiring of the son of a Chinese commerce minister is being scrutinised by investigators looking at whether the bank improperly hired relatives of government officials to win influence and business.

People familiar with the matter said Gao Jue, known on Wall Street as Joe Gao, was among various hirings at JPMorgan and other banks that are being examined for possible violations of the US Foreign Corrupt Practices Act. JPMorgan is expected to pay a penalty to settle the allegations later this year, according to other people familiar with the case.

Mr Gao, who is now employed by Goldman Sachs, started working full-time at JPMorgan in 2007 in spite of negative reviews from colleagues, which were revealed in emails published on Friday by the Wall Stret Journal.

In a 2008 email, Fang Fang, then chief executive of JPMorgan China, wrote to Gaby Abdelnour, then the bank's head of Asia, to say that Gao Hucheng, the China vice-minister for commerce, had "spent [a] long time explaining to me why it is important for the son to find another position within JPM . . . because he is desperate to maintain his hard-won H1-B visa which is under JPM sponsorship".

"The father indicated to me repeatedly that he is willing to go extra miles to help JPM in whatever way we think he can," the email continued. "And I do have a few cases where I think we can leverage the father's connection." The junior Mr Gao and Mr Fang could not immediately be reached for comment. JPMorgan and Goldman declined to comment.

Why JPMorgan is taking profit on US dollar, for now

It followed a 2006 email about the junior Mr Gao where he was described as having done "very very poorly in interviews — some MDs [managing directors] said he was the worst BA candidate they had ever see[n]".

In a brief March 2009 email Mr Gao wrote to Mr Fang, saying: "Uncle Fang, I was told earlier this morning that today is my last day at work. It came earlier than I expected."

Mr Fang resigned from JPMorgan in March last year after 12 years with the bank and has been interviewed by Hong Kong's Independent Commission Against Corruption.

In the US, the Securities and Exchange Commission and the Department of Justice launched a probe in 2013 into whether JPMorgan had hired princelings — the family members of influential figures in the Chinese government and elite — to win business.

More from the FT

BNP chiefs lose bonuses after $8.9bn fine
Pictet reveals first annual results
Pan-European digital current account launched

The probe has hurt JPMorgan's business in Asia, causing the bank to pull out of two high-profile initial public offerings — Tianhe Chemicals and Everbright Bank.

I is one of the most significant outstanding investigations into the bank, which last year paid a record $13bn penalty over allegations it mis-sold mortgage-backed securities.

The investigation later broadened outside JPMorgan and outside China. Goldman disclosed last year that it was also under investigation for its hiring practices in Asia.

Mr Gao started working for Goldman in 2013 and is now in the bank's natural resources group in Hong Kong.

Related Tags