This summer JPMorgan Chase & Co. (JPM) has already been sanctioned for engaging in a price fixing scheme involving energy grids, and watched indictments get handed down for their role in the “London Whale” investment debacle that ended up costing the bank $6.2 billion.
On Aug. 17, The New York Times revealed the bank is under investigation by the Securities Exchange Commission for a third major infraction, this time over allegations that the firm hired the children of Chinese banking officials in exchange for favorable contracts.
JPMorgan’s Chinese offices are alleged by the SEC to have engaged in a systematic hiring scheme to curry favor with officials. In one key example, the bank hired the son of banking regulator Tang Shuangning, and subsequently scored multiple coveted assignments.
The giant investment bank has been rocked by sanctions and regulatory investigations as of late. On Aug. 12, the SEC and Department of Justice concomitantly charged two former traders over JPMorgan’s role in a fraud case involving the hiding of massive trading losses at their London branch that the press dubbed the “London Whale.”
The SEC also stated that JPMorgan could be forced to admit culpability in the London Whale scandal, and not settle while neither admitting nor denying wrongdoing. If the bank is forced to admit their role in the scandal, the bank could be opened up to lawsuits from shareholders who saw their investments sour on the sudden revelation of the trading losses.
JPMorgan previously settled with the government, grid companies and investors to the tune of $410 million over allegations the bank engaged in a systematic price fixing scheme to artificially inflate power costs.
The bank is currently under investigation from eight different regulatory bodies in the US, yet has still been posting record earnings. However, this latest round of allegations was enough to send JPMorgan’s stock down noticeably.
JPMorgan is down 2.20 in early trading to hit $52.12 a share.