The US financial watchdog has revealed JP Morgan profited from government officials throughout the Asia-Pacific region by employing their relatives and friends.

JP Morgan will pay more than $130 million to settle charges after the Securities and Exchange Commission discovered the firm won business from corrupt clients, including government officials, in the Asia-Pacific region after employing their relatives and friends.

The New York-headquartered bank is also expected to pay $72 million to the US Justice Department and $61.9 million to the Federal Reserve Board of Governors for a total of more than $264 million in sanctions resulting from fraudulent hiring practices. 

According to the SEC, investment bankers at JP Morgan's Asian subsidiary created a client referral hiring program that bypassed the standard recruitment process and offered employment to job candidates referred by client executives and government officials.

The SEC statement did not mention whether individuals from the firm's private banking division were involved.

During a seven-year period, the bank hired around 100 interns and full-time employees at the request of foreign government officials, enabling the firm to win or retain business totalling more than $100 million in revenues to JP Morgan.

As a result, the organization violated the Foreign Corrupt Practices Act.

“The misconduct was so blatant that JPMorgan investment bankers created ‘referral hires vs revenue’ spreadsheets to track the money flow from clients whose referrals were rewarded with jobs,” said Kara Brockmeyer, chief of the SEC enforcement division’s FCPA unit.

She added: “The firm’s internal controls were so weak that not a single referral hire request was denied.” 

This publication has reached out to the SEC for further details on the case and will update coverage accordingly.