A prominent U.S. newspaper says the federal government has opened an investigation into whether
JPMorgan Chase hired the children of powerful Chinese officials to help the bank win lucrative business in China.
In a story posted on The New York Times website Saturday, the newspaper cited a "confidential United States document" as its source.
The newspaper account, however, says government documents and public records "do not definitively link" JPMorgan's hiring practices to its ability to win business, nor do they suggest the employees were unqualified. The report says the bank has not been accused of any wrongdoing.
The Times said the JP Morgan hired Tang Xiaoning, the son of Tang Shuangning, a former Chinese banking regulator who is now the chairman of the China Everbright Group, a state-controlled financial conglomerate.
The newspaper says after the chairman's son came on board, the ban received "multiple coveted assignments" from the conglomerate, including advising a subsidiary of the company on a stock offering.
The New York Times also says JPMorgan's Hong Kong office hired Zahng Xixi, the daughter of a Chinese railway official. About that time the bank was selected to help take a company that builds railways for the Chinese government with its plans to become a public company. The railway official was later convicted of doling out government contracts in exchange for cash bribes, according to government document and public records.
The New York Times said JPMorgan made an "oblique reference" to the government's investigation in its quarterly filing this month. The Times reported the filing stated that the Securities and Exchange Commission had sought information about JPMorgan's "employment of certain former employees in Hong Kong and its business relationships with certain clients."