J.P. Morgan Chase & Co. agreed to pay $264 million to resolve civil and criminal charges that violated a foreign corruption law by trying to win business by hiring the relatives of powerful government officials in Asia.
The accord, announced Thursday, includes a nonprosecution deal with the Justice Department and settlements with the Securities and Exchange Commission and the Federal Reserve. It comes after a multiyear, high-profile investigation into the bank's hiring practices that had called into question whether the U.S. government was threatening to criminalize standard business practices in some countries.
According to the agreement, J.P. Morgan's Asia unit admitted it set up in 2006 a client referral program known as the "Sons and Daughters" effort to prioritize hires linked to upcoming client deals. Authorities said the bank hired 100 interns and full-time employees at the request of foreign officials. To be hired, a referred candidate had to have a "directly attributable linkage to business opportunity," according to the pact.
"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.
J.P. Morgan spokesman Brian Marchiony said the bank is "pleased that our cooperation was acknowledged in resolving these investigations" and that the conduct was "unacceptable." Mr. Marchiony said the bank stopped the hiring program in 2013 and "took action against the individuals involved."He added that the bank is still committed to the Asia-Pacific region.
Several other banks remain under investigation for hiring relatives of high-ranking Chinese government officials and managers of state-owned companies, and the J.P. Morgan agreement could prove to be a template for additional resolutions.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
November 17, 2016 11:25 ET (16:25 GMT)
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