Top Hong Kong Regulator Peter Pang Referred Son for J.P. Morgan Internship
December 01 2015 - 10:13PM
Dow Jones News
By Ned Levin
HONG KONG--A top official at a Hong Kong regulator investigating
J.P. Morgan Chase & Co.'s Asian hiring program is listed in an
internal J.P. Morgan document as having referred his son for an
internship there.
Peter Pang, one of three deputy chief executives at the Hong
Kong Monetary Authority, made the recommendation to the bank in
2006, according to the document, which was prepared by J.P. Morgan
to be submitted to U.S. investigators in April. Mr. Pang was
appointed to his position, where he handles monetary management,
financial infrastructure and research, in 2004. Mr. Pang has no
role in his agency's probe.
Several senior Chinese regulators are named in the document as
having referred candidates to J.P. Morgan, including mainland
Chinese banking, insurance and securities regulators. But Mr. Pang
is the only official named in the document who works at an agency
which is investigating J.P. Morgan for the hires. A spokeswoman for
J.P. Morgan declined to comment on the document, Mr. Pang, or the
investigations.
J.P. Morgan hired 222 candidates referred by a broad spectrum of
China's business and political elite under a program known
internally as "Sons and Daughters," the document indicates. U.S.
authorities have been investigating the program for the past two
years to determine whether the bank's hires might have constituted
bribery under the U.S. Foreign Corrupt Practices Act, according to
bank filings, internal documents and people familiar with the
matter. The FCPA makes it illegal for companies or their agents to
give anything of value to foreign officials, including employees of
state-owned companies, with the intention of improperly influencing
them.
The HKMA holds a wide range of powers as both Hong Kong's
banking regulator and its de facto central bank. It oversees the
city's foreign exchange reserves, which were worth $406 billion at
the end of last year.
Mr. Pang said via a spokeswoman that he sent his son's CV to a
friend at J.P. Morgan in 2006, and that his son, at the time an
economics student at the University of Chicago, was subsequently
offered a summer internship with the bank. Mr. Pang's duties at the
HKMA didn't involve supervising or having business dealings with
the bank, and his son went through a selection process for the
internship, he said.
"I had not done anything to influence J.P. Morgan's recruitment
decision other than just sending over the CV," Mr. Pang said.
The HKMA spokeswoman said the HKMA was working with other
authorities in looking into J.P. Morgan's hiring practices.
"HKMA requires banks to maintain proper employment systems as
well as adequate internal controls on potential conflict of
interests," the spokeswoman said, declining to comment further on
J.P. Morgan.
The HKMA has been looking into other banks in addition to J.P.
Morgan for their hiring practices, people familiar with the
investigations said. It has been interviewing current and former
J.P. Morgan staff as well as requesting summaries and emails
related to hires referred by executives at both state-owned and
private companies, the people said.
The HKMA doesn't have the power to issue fines, but it can
require banks to take remedial actions such as changing their
procedures or disciplining employees, according to a person
familiar with the HKMA. In extreme cases, the HKMA can remove top
executives or limit business operations. It also provides its
investigation findings to Hong Kong's securities regulator, the
Securities and Futures Commission, which can issue fines.
The bulk of J.P. Morgan's hires under the "Sons and Daughters"
program were referred by government officials and executives in
mainland China, according to the document. Some came from corporate
executives in Hong Kong, including several of the city's top
conglomerates. Small numbers of referrals came from executives in
other parts of Asia including Mongolia, India, Vietnam and
Thailand.
Write to Ned Levin at ned.levin@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 01, 2015 21:58 ET (02:58 GMT)
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