Fed Bars Former JPMorgan Subsidiary Executive Over Referral Hiring Scheme -- Update

By Mengqi Sun 

The Federal Reserve Board permanently barred a former managing director of a JPMorgan Chase & Co. subsidiary from the banking industry over his involvement in a referral hiring program that the board says violated U.S. antibribery law.

Timothy Fletcher oversaw a program at JPMorgan's Asia-Pacific region investment bank that offered internships or other employment opportunities. Through the program, people referred by foreign government officials and existing or prospective clients were offered employment opportunities in exchange for winning business for the company, according to a Feb. 15 order issued by the board.

Mr. Fletcher was the head of the program from at least 2008 to 2013 and helped institutionalize it as a formal structure to compete with other banks and win business, according to the Fed. He was terminated from the bank in April 2015.

The program, known internally as the Sons and Daughters program, earned the bank at least $35 million, according to the Justice Department. The U.S. antibribery law prohibits companies and their employees from giving anything of value to foreign officials in an effort to improperly influence them.

JPMorgan reached settlements related to the scheme with the U.S. Justice Department, the Securities and Exchange Commission and the Fed, and it has agreed to pay about $264 million in fines and penalties, the Fed said. JPMorgan also admitted that it violated the Foreign Corrupt Practices Act.

The Fed in 2017 first sought a permanent ban against Mr. Fletcher. It also sought a civil penalty of $500,000 from Mr. Fletcher, which wasn't part of the settlement announced Thursday.

A lawyer for Mr. Fletcher declined to comment. JPMorgan also declined to comment.

Write to Mengqi Sun at [e-mail]

(END) Dow Jones Newswires

February 22, 2019 16:14 ET (21:14 GMT)

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