US banking giant JPMorgan Chase & Co has drawn scrutiny from US prosecutors, who are investigating the Asian hiring practices of a number of global banks, over its hiring of the son of China's current commerce minister, The Wall Street Journal reported, citing people briefed on the investigation.
Gao Jue, son of China's current commerce minister, was hired by the bank, despite having been described as "immature, irresponsible and unreliable" by senior bankers, the newspaper said, citing internal bank emails and people familiar with the matter.
When Gao faced a layoff, China's current commerce minister Gao Hucheng said he would be willing to "go extra miles" for the bank if it kept him on, the WSJ revealed, citing a bank executive's email account of a dinner with the minister.
Internal bank emails also reportedly reveal that JPMorgan's decision to hire Gao was supported by senior executives at the bank.
Gao's name has not previously been reported in connection with the hiring probe, which JPMorgan disclosed in a 2013 regulatory filing.
Regulators' inquiries into JPMorgan and other banks are centred on the US Foreign Corrupt Practices Act (FCPA), under which companies are not allowed to seek improper advantage with firms abroad with gifts of "anything of value".
Federal prosecutors view Gao's hiring as a potential violation of the FCPA because of indications of some sort of "quid pro quo" involving his influential father, while the bankers saw the son as ill-qualified, the people briefed on the investigation told the newspaper.
Gao is currently working with the Goldman Sachs Group.
The US Justice Department and the Securities and Exchange Commission are expected to reach a settlement with JPMorgan related to the US anti-bribery law. The settlement may involve a fine and warrant an overhaul of the bank's hiring practices, according to WSJ.