JP Morgan Chase & Co. (NYSE:JPM) support some hiring measures in Asia that are questionable which is why the company is facing investigation by the US authorities. The basis of this claim was extracted through some internal bank e-mails which were reported by Wall Street Journal in the News on Friday.
The questionable hiring case was brought to limelight when the company appointed Mr. Gao Jue despite the fact that his interview had gone extremely bad. Mr. Jue became a member of the company in the year 2007 but left in just two year’s time. During the time that he was at the company, he was known for his irresponsible and immature behaviour.
A senior banker at the company said that Mr. Jue was the worst BA applicant that the company had ever witnessed. The question arises now is why he was hired in the first place and as an answer to this question one can only note that his father was an influential man. According to the e-mails that were gained by WSJ, Mr. Jue’s father Gao Hucheng who was a commerce minister in China had offered the company his services to the company, provided that the company agreed on not terminating the appointment of his son in 2008’s series of layoffs.
Mr. Hucheng was at a good position and could prove helpful to JP Morgan which is why the company agreed to his terms. This can be proved through an e-mail which was exchanged between WSJ and Bank of China’s banking head Fang Fang. According to the e-mail, Gao Hucheng had indicated that he was ready to go out of his way to help JP Morgan. Fang Fang is not associated with the financial-services firm any more.
As if Mr. Hucheng’s interference and the inadequacy of his son was not enough, to add fuel to fire, news of Mr. Jue’s misbehaviour came to the limelight. Mr. Jue sent an e-mail to an HR employee of the company which had sexually explicit content. Although the company had no connection with the behaviour of Mr. Jue, the hiring process was not completely legal.
According to a report by WSJ the US commerce secretary, William Daley is the main person who is to be blamed for the hiring along with JP Morgan’s head of operations.
Moreover, to make things even worse, another series of e-mails were revealed that took place between Sherry Liu, a banker in Hong-Kong and Mr. Daley. In the emails Mr. Liu had written to Mr. Daley that the ministry will open ways for them to enter many significant industries in China and Daley had replied by saying that he had a very positive meeting with Mr. Hucheng.
For now, Gao Jue is working at Goldman Sachs Group (NYSE:GS). However, he is silent about the whole controversial issue. If the allegations are proved than the company will have to face a heavy fine by the US authorities. JP Morgan is having a difficult 2015. The company is facing a fine of $35.7 million for accepting payments from Genuine Title which were illegal. The company’s stock declined 0.12% on Monday.