The fallout from the Asia Pacific securities division of JP Morgan Chase hiring program continues as the Federal Reserve moves to bar two former JP Morgan Chase managers from the securities industry.
In a press release the Fed stated: “The Federal Reserve Board announced on Friday it will seek to fine and prohibit Fang Fang and Timothy Fletcher, two former managing directors at J.P. Morgan Securities (Asia Pacific) Limited, from working in the banking industry for their participation in a referral hiring program that violated anti-bribery law.
“Fang and Fletcher are alleged to have offered internships and other employment opportunities to individuals referred by foreign officials, clients, and prospective clients in order to obtain improper business advantages in violation of firm policies and U.S. anti-bribery law. In addition to permanently prohibiting them from the banking industry, the Board seeks to impose a $1 million fine against Fang and a $500,000 fine against Fletcher.”
In November 2016, the Federal Reserve fined JP Morgan Chase $62 million for the same scandal, finding that “From approximately 2004 to 2013, the Firm’s [JP Morgan Chase] APAC investment banking group operated a referral hiring program to provide internships, training, and other employment opportunities to candidates referred, directly or indirectly, by foreign government officials and existing or prospective commercial clients who were not qualified for the Firm’s traditional internship program (“Referral Hires”).”
The Asia Pacific securities division of JP Morgan Chase has gained some notoriety over the last few years. This is the third time an oversight body has found the division to have breached securities trading rules.
In 2015, the Securities and Futures Commission – the securities regulator for Hong Kong – fined the same division $30 million after finding them guilty of lack of institutional control in their short selling activities.
In October 2016, the SFC again found a lack of institutional control in disclosure failures in research reports, this time fining the division $5.6 million.