“We publicly disclosed this matter in our 10-Q filing last week, and are fully cooperating with regulators,” a spokesman for JPMorgan said.
The Ministry of Railways, which has since been restructured into various agencies, and the China Everbright Group did not respond to requests for comment. A spokeswoman for the SEC declined to comment.
Attempts made at the weekend to reach Zhang Xixi and Tang Xiaoning, both of whom have left JPMorgan, were unsuccessful.
Global companies also routinely hire the sons and daughters of leading Chinese politicians.
What is unusual about JPMorgan is that it hired the children of officials of state-controlled companies.
It is even less common for US authorities to scrutinize such practices. Only a handful of Wall Street employees have ever faced bribery accusations, including a former Morgan Stanley executive in China who pleaded guilty to criminal charges last year, admitting to “an effort to enrich himself and a Chinese government official.”
Legal experts note that there is nothing inherently illicit about hiring well-connected people.
To run afoul of the law, a company must act with “corrupt” intent, or with the expectation of offering a job in exchange for government business.