A&O Shearman FCPA Digest | United States v. JPMorgan (Asia Pacific) Limited (2016)

Source Documents

Nature of Business
JPMorgan is a Delaware incorporated, New York headquartered financial services firm with operations around the world. JPMorgan’s shares are publicly traded on the New York Stock Exchange. JPMorgan Securities (Asia Pacific) Limited (“JPMorgan-APAC”) is JPMorgan’s wholly-owned subsidiary headquartered in Hong Kong, China. JPMorgan-APAC principally carries out JPMorgan’s investment banking services for the Asia-Pacific Region.

Influence to be Obtained
According to the DOJ, between approximately 2006 and 2013, JPMorgan-APAC bankers set up and used a client-referral program (often referred to as the “Sons & Daughters Program”) to hire job candidates for the purpose of influencing senior officials at clients to award business to the company on a quid pro quo basis—in contravention of the company’s express anti-corruption policies. In several cases, the DOJ alleges that as a result of the Sons & Daughters Program, JPMorgan-APAC received investment banking mandates from Chinese state-owned entities whose executives referred candidates to the company. According to the DOJ, the bank’s improper hiring practices netted the company $35 million in profits.

Enforcement
On November 17, 2016, the DOJ announced that it had resolved its FCPA enforcement action against JPMorgan-APAC. According to the parties’ non-prosecution agreement, JPMorgan-APAC was required to pay a $72 million penalty as a result of its violation of the FCPA. On the same day, the SEC announced a separate FCPA enforcement action against JPMorgan-APAC’s parent company, JPMorgan, wherein the New York bank was required to pay an additional $130.5 million sanction.